HRAs use the IRC §213(d) definition as a baseline for eligible expenses, but employers may restrict which 213(d) expenses the HRA will reimburse. Unlike HSAs, HRAs require substantiation and follow strict plan document rules.
Refer to IRC §213(d) Medical Expenses page for more detailed information on allowable expenses.
Integrated HRA-Specific Rules: Employer Plan Design Controls What Is Reimbursable
HRAs can reimburse:
- All 213(d) medical expenses, or
- A narrower, employer-selected list (common)
Examples of plan design limitations:
- No out-of-network expenses
- No OTC unless prescribed
- Only copays and deductibles
- Only reimbursement after deducible has been satisfied
The employer’s self-created ERISA plan document is the source of truth and documents eligible expenses.
HRAs Cannot Reimburse Individual and Family Plan (IFP) Premiums (Except ICHRAs)
Standard HRAs cannot pay:
- Marketplace premiums
- Individual policy premiums
Exceptions:
- Retiree HRAs (commonly reimburse premiums)
- ICHRA rules
HRAs May Reimburse Group Insurance Premiums – with Important Caveats
If designed to allow it, HRAs may reimburse:
- COBRA
- Employer-sponsored group health premiums
- Medicare premiums
- LTC premiums (within caps)
Not all employers allow this; employers have discretion in plan design.
Substantiation Is Required
HRAs must validate:
- Date of service
- Type of service
- Amount incurred
- Proof that the service was performed
An Explanation of Benefits (EOB) or itemized receipt is required. Self-certification is never allowed.
Expenses Must Be Incurred During Coverage
Expenses incurred before HRA coverage begins or after it ends are not eligible.
Run-out periods allow claim submission, not incurring new expenses.