Question: How does the health reimbursement account work for the employee?
Answer: A HRA fund or account is money that is set aside by your employer and is used toward medical expenses for some your out-of-pocket medical expenses. For example, if you have an annual deductible of $2,500 and a $1,000 fund, up to $1,000 of your medical expenses is paid out of that account. You are then responsible for your remaining expenses up to $2,500, when the high-deductible health insurance coverage kicks in. Health Reimbursement Arrangements (HRAs) get preferential tax treatment - you are not taxed on the amount reimbursed.