Health Reimbursement Accounts are employer-funded accounts that can be used for reimbursement of eligible expenses after separation from service. Many employers offer Health Reimbursement Accounts as part of their retirement incentive packages for employees. These plans offer tax advantages to the employer and participants in the plans. The employer pays no FICA taxes on contributions to the plan. Participants pay no FICA, Federal, or state income taxes on contributions, earnings, or distributions for qualified expenses.

HRAs can be established as Insurance Premium Reimbursement Accounts (which do not require discrimination testing) or Medical Expense Reimbursement Accounts (which do require discrimination testing).

Insurance Premium Reimbursement Accounts cover:

  • Health Care Premiums
  • COBRA Premiums
  • Medicare Part-B Premiums
  • Medicare Supplement Premiums
  • Long-term Care Insurance Premiums

Medical Expense Reimbursement Accounts cover:

  • Health Care Premiums
  • COBRA Premiums
  • Medicare Part-B Premiums
  • Medicare Supplement Premiums
  • Long-term Care Insurance Premiums
  • Qualified out-of-pocket medical expenses such as prescription drugs, eye glasses, and office visit co-pays

Please contact our Employer Plans Division at (800) 433-1828, ext. 3 or email us at epdinfo@4kmc.com for more information.

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