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HRAFlex
What is HRAFlex?
A great way for employers to help employees when they need it most with an employer-owned HRA. The employer assigns a value or account limit to the employees HRA account to help pay for qualified medical expenses, including deductibles and copays.
Advantages for Employers:
- Reimbursements of qualified claims are tax-deductible for the employer
- Employers limit their exposure by establishing the maximum expense a participant may spend related to their health care benefit
Advantages for Employees:
- Contributions by employers are excluded from employees' gross income
- Reimbursements are tax free if the employee incurs a qualified medical expenses
Implementation made easy for all tax advantage HRAs:
- HRAs can be paired with any health insurance plan
- Employer owned accounts have flexibility in offering a customized definition of reimbursable expenses (HRAs can be designed to pay deductibles, copays, and other out-of-pocket medical expenses)
- The employer has a way to define the qualified expenses of the plan, and ESG has the ability to estimate claims based on the actual plan design (HRAs also have the option of rolling over any unused funds to the next year)
What can HRAFlex do for your company?
A Tax Advantaged Strategy that will Save Employers Thousands in Healthcare Premiums Annually!
- Employers will reduce the cost of group insurance plans using the reality that only a smaller percentage of employees will incur a qualified medical event
- This reality of insurance risk management generates premium savings up to 30% annually
- ESG deploys automated technology intelligence and automatic reimbursement plans that enhance employee benefit programs
IRS Contribution Limits for 2025
The IRS released 2025 contribution limits for medical flexible spending accounts (medical FSAs), commuter benefits, and more as part of Revenue Procedure 2024-25. These limits undergo annual adjustments to account for inflation.
Introducing Health Reimbursement Arrangement (HRA):
A Convenient Solution for Employee Medical Expenses
A Health Reimbursement Arrangement (HRA) is an employer-funded account designed to repay unreimbursed medical expenses incurred by employees. With HRA, employers no longer need to pre-fund the entire account; instead, they can simply reimburse employees as they submit claims. This innovative approach allows employers to save more as employees spend less on medical expenses.
A Health Reimbursement Arrangement (HRA) is a smart way to motivate and retain current employees, assist retirees, and help reduce healthcare costs. With a FlexHRA, your company determines methods to fill in benefit gaps, using a strategy of tax-free reimbursements. Employers can establish limits to protect the company budget, while typically saving thousands of dollars in insurance premium costs. HRAFlex is flexible and is designed to reimburse medical expenses such as deductibles, coinsurance, copay’s, or other uninsured expenses including dental, vision or even prescriptions drugs on a tax free basis.
HRAFlex offers THREE basic types of HRAs:
- Incentive HRA creates incentive for employees to participate in (For example: a health risk assessment or a smoking cessation or weight management program where HRA funds are contributed as credits are earned)
- Post Deductible HRA strategies offer an HRA designed to supplement HDHP qualified insurance plans typically referred to as HRA qualified plans
- Traditional High Deductible Health Plan HRA complements traditional PPO and HMO Insurance Plans. Traditional HRAs are designed to offset out-of-pocket healthcare costs while reducing healthcare premiums.
HRAFlex is good for your company’s bottom line because it reduces healthcare premium costs by offering tax free reimbursements to your employees while saving thousands of dollars.
Stay Compliant with IRS Guidelines
In 2002, the IRS issued important guidance surrounding IRC 105, now known as Health Reimbursement Arrangements (HRA). This ruling emphasizes the need for proper plan documentation and the application of specific non-discrimination rules. Here are some key points to consider:
- Companies of any size can establish a tax-free HRA program
- An HRA grants employers control over the expenses eligible for reimbursement, providing flexibility to design a benefit plan that caters to employees' needs
- Employers have the option to use an HRA alongside or instead of a traditionally insured group medical plan
- An HRA can reimburse the same expenses covered by a Section 125 Medical Flexible Spending Account (FSA)
Benefits of our HRAFlex Program
By implementing our HRA program, employers can reap numerous benefits that positively impact both their budget and employees' well-being:
- Reduced benefit costs: Our HRA program saves employers thousands of dollars in premium costs annually
- Tax-free reimbursements: All HRA reimbursements are tax-free benefits paid to employees for qualified medical expenses
- Specialized customer service: Our dedicated team provides HRA-specific customer service and comprehensive claim support
- Streamlined claims processing: We process claims daily and offer direct deposit for quick and convenient reimbursements
- Online account summary dashboard: Employers can access an intuitive online dashboard for easy administration and oversight
Explore Popular HRAFlex Plan Designs
Our HRA program offers a range of popular plan designs to cater to diverse employee needs
- Qualified Medical Expenses for Employees and their Families
- Individual Health Plan Premium Reimbursement
- Single Expense Reimbursement (e.g., Dental or Vision)
- Insurance Deductible Replacement
- Hybrid Designs (Using multiple strategies to capture the best of different options)
HRAFlex: Customize Your Benefit Plan
HRAFlex empowers employers to design a benefit plan tailored to their specific requirements while maintaining cost control. By choosing our program, you can:
- Reduce benefit costs and embrace the Consumer Driven Health Care approach
- Accommodate the needs of a diverse employee group through a dual-choice insurance strategy
- Establish a long-term strategy that significantly reduces benefit renewals
- Create customized reimbursements each year to bridge the gaps in your selected insurance product
Frequently Asked Questions - About HRAs
A health reimbursement arrangement (HRA) allows employers to reimburse employees for various medical expenses listed in IRS Publication 502, which includes more than 200 eligible expenses. The type of HRA you have determines the eligibility of expenses.
For example, if you have a qualified small employer HRA (QSEHRA) or an individual coverage HRA (ICHRA), your organization can reimburse you for your individual health insurance premiums. But if you have an integrated HRA, also known as a group coverage HRA (GCHRA), your health plan premiums aren’t eligible for reimbursement. However, you may submit your copayments, coinsurance, and deductible amounts for reimbursement.
While the IRS initially prohibited employers from reimbursing employees tax-free for some medical items, the CARES act expanded eligible items to include over-the-counter medicines without a prescription and menstrual care products in 2020.
With an HRA, you can purchase the expenses that make sense for you and your family’s health. Check out our the list below to see what medical services and items are eligible for reimbursement to get the most out of your health benefit.
✔ : Items that are eligible for reimbursement
✔ RX : Items that are eligible with a prescription from your doctor
✔ NOTE : Items that are eligible with a note from your doctor
X : Items that aren't eligible for reimbursement
- Acid controllers ✔
- Acne medicines and treatments✔
- Acupuncture✔
- Adoption (associated medical expenses)✔
- Adoption feesX
- Alcoholism treatment✔
- Allergy and sinus medicine and products✔
- Alternative dietary supplements✔ NOTE
- Alternative healers✔ NOTE
- Ambulance and emergency health services✔
- Anesthesia for dental treatments✔
- Anesthesia for medical treatments✔
- Anesthesia for vision treatments✔
- Antacid✔
- Anti-diarrheal medicine✔Anti-itch products✔
- Antibiotic ointment✔
- Artificial limb✔
- Aspirin or other pain reliever✔
- Asthma medicines or treatments (over-the-counter)✔
- Baby bottlesXBaby oilX
- Baby rash ointment✔
- Bandages and related items✔
- Birth control (over-the-counter)✔
- Blood pressure monitor✔
- Body scans✔
- Braille books and magazines (additional amount only)✔
- Breast enhancementX
- Breast pumps & accessories✔
- Breast reconstruction surgery (following mastectomy)✔ NOTE
- Breastfeeding classes✔
- Cancer insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)XCanker and cold sore treatments (over-the-counter)✔
- Car modifications✔ NOTE
- Child or newborn care instructionX
- Childbirth classes (charges for mother only)✔
- Chiropractic care✔
- Cholesterol test kits and supplies✔
- Christian Science practitioners✔
- COBRA premiums (COBRA premiums are only reimbursable with a QSEHRA, not an ICHRA or a GCHRA)✔
- Cold and flu medicine✔
- Compression or anti-embolism socks, stockings, or hose✔ NOTE
- Concierge medical fees for future servicesX
- Concierge medical fees for services received✔
- Contact lenses and solutions✔
- Contraceptives✔
- Cord blood storage✔ NOTE
- Cord blood storage (for unidentified future use)X
- Corn and callus remover✔
- Corneal keratotomy✔
- Cosmetic procedures for birth defects or injury✔ NOTE
- Cosmetic procedures or surgeryX
- Cost of meals while attending medical conferencesX
- Cotton swabsX
- Cough drops and sore throat lozenges✔
- Cough syrup✔
- Counseling (marriage)X
- CPR classesX
- Dancing lessonsX
- Dental and oral pain products (over-the-counter)✔
- Dental care (non-cosmetic)✔
- Dental insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Dental products for general healthX
- Dental surgery✔
- Dental veneers✔ NOTE
- Dentures, bridges, etc.✔
- Dependent care expenses (medical)✔
- Dermatologist✔
- Dermatology products✔ NOTE
- Diabetic monitors and supplies✔
- Diaper rash creams (over-the-counter)✔
- Diapers and diaper servicesXDietary supplements✔ NOTE
- Dietitian/nutrition services✔ NOTE
- Doctor visits (medical)✔
- Doctor-supervised weight loss program, such as for hypertension or heart disease✔ NOTE
- Doula or birthing coach✔ NOTE
- Drug addiction treatment✔
- Drugs and medicines (over-the-counter drugs)✔
- Drugs imported and FDA-approved✔
- Drugs imported and not FDA-approvedX
- Drugs purchased and consumed in another country that are legal in that country and the U.S.✔
- Dyslexia treatment✔ NOTE
- Ear drops and wax removal (over-the-counter)✔
- ElectrolysisX
- Exercise equipment✔ NOTE
- Eye drops and treatments✔
- Eye examinations✔
- Eye surgery or treatment✔
- Eye-related equipment/materials✔
- Eyeglasses (prescription)✔
- Face masks for COVID-19 protection✔
- FaceliftsX
- Feminine hygiene products (see menstrual care products below)✔
- Fertility monitor✔
- Fertility treatment✔
- Fiber supplements✔
- First aid kits✔
- Fitness programs✔ NOTE
- Flu shots✔
- Fluoride treatments✔
- Foam rollers (for pain relief)✔
- Funeral expensesX
- Guide dog (dog, training, care)✔
- Hair regrowth productsX
- Hair removalX
- Hair transplantX
- Hair treatmentsX
- Hand lotionX
- Hand sanitizer and sanitizing wipes for COVID-19 protection✔
- Health club dues✔ NOTE
- Health insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Health savings account (HSA) contributionsX
- Hearing aids and batteries✔
- Herbal or homeopathic medicines✔ NOTE
- Home modifications✔ NOTE
- Hospital insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)XHospital services and fees✔
- Household helpX
- Humidifier, air filter and supplies✔ NOTE
- Immunizations✔
- In vitro fertilization✔
- Incontinence supplies✔
- Infertility treatment✔
- Insulin, testing materials and supplies✔
- Laboratory fees✔
- Lactation items and devices (for convenience)X
- Lactose intolerance medication✔
- Lamaze classes (charges for mother only)✔
- Laser / LASIK eye surgery✔
- Late payment feesX
- Laxatives/stool softeners✔
- Learning disability treatments✔
- LED light therapy treatments✔
- Lice treatment (over-the-counter)✔
- Listening therapy✔
- Lodging for dental or vision care✔
- Lodging for medical care✔
- Long-term care premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Long-term care servicesX
- Magnetic therapy✔ NOTE
- Massage therapy✔ NOTE
- Mastectomy-related special bras✔
- Maternity clothesX
- Meals at a hospital or similar institution (if the principal reason for being there is to receive medical care)✔
- Medicaid/CHIP insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Medical abortion✔
- Medical diagnostic services✔
- Medical equipment and repairs✔
- Medical literature, books, pamphlets, or audioXMedical monitoring and testing devices✔
- Medical operations✔
- Medical records charges✔
- Medical X-ray fees✔
- Medicare Part A, Part B insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Medicare supplement insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Menstrual care products (tampons, pads, liners, cups, sponges, and other similar products)✔
- Mental health counseling✔
- Midwife✔
- Modified equipment (extra cost only)✔ NOTE
- Monitors and test kits✔
- Motion sickness medication✔
- Multiplan insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Nasal sprays✔
- Nasal strips✔
- Norplant insertion or removal✔
- Nursing services (wages and taxes)✔Nutritional supplements✔ NOTE
- OB/GYN fees✔
- Occlusal guards to prevent teeth grinding✔
- Occupational therapy (for medical / disability)✔
- Optometrist or ophthalmologist fees✔
- Organ transplants (recipient and donor)✔
- Ortho keratotomy✔
- Orthodontia (braces and retainers)✔
- Orthopedic and surgical supports✔
- Orthopedic shoes and inserts✔ NOTE
- Orthotics✔
- Ovulation monitor✔
- Oxygen✔
- Physical exams✔
- Physical therapy✔
- Physical therapy supplies✔
- Physician retainer feeX
- Pregnancy tests✔
- Premium tax credits (the portion of insurance premiums that tax credits cover)X
- Prescribed drugs for cosmetic purposesX
- Prescription drugs✔
- Prescription insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Psychiatric / therapy✔
- Radial keratotomy✔
- Reading glasses✔
- Short-term medical insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Sleep aids and sedatives (over-the-counter)✔
- Smoking cessation (programs/counseling)✔
- Smoking cessation drugs, nicotine gum, or patches✔
- Special equipment✔ NOTE
- Special foods✔ NOTE
- Special school (for mental and physical disabilities)✔ NOTE
- Speech therapy✔
- Spermicidals✔
- Splints, supports, and braces✔
- Sterilization✔
- Stomach remedies/aids for indigestion✔
- Sunglasses (prescription)✔
- Sunscreen / sunblock and creams with SPF 15+✔
- Sunscreen / sunblock with SPF <15 or suntan lotionX
- Surgery (non-cosmetic)✔
- Swimming lessons (for general health)X
- Swimming lessons (for therapy)✔ NOTE
- Take-home urinary tract infection test✔
- Teeth bleaching or whiteningX
- Toothpaste, medicated (difference in cost only)✔ RX
- Toothpaste, toothbrush, floss, etc.X
- Transgender treatments/surgery✔ NOTE
- Transportation and parking (to dental or vision care)✔
- Transportation and parking (to eligible medical care)✔
- TRICARE insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Tubal ligation✔
- Tuition or educational classes✔ NOTE
- Urological products✔
- UV protection clothingX
- Vaccinations✔
- Varicose vein removal surgery (for medical care)✔
- Vasectomy✔
- Vision care✔
- Vision insurance premiums (Premiums are only reimbursable with a QSEHRA or ICHRA, not a GCHRA)✔
- Vision operations✔
- Vision products✔
- Vitamins✔ RX
- Vitamins (for general health)X
- Walking aids (canes, walkers, crutches)✔
- Wart removal treatments✔
- Weight loss drugs✔ RX
- Weight loss foodsX
- Weight loss program (for general health)X
- Wheelchair and repairs✔
- Wound care✔
Experience the convenience and flexibility of HRAFlex. Contact us to learn more!
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