What is a Health reimbursement arrangement?
A Health reimbursement arrangement (HRA) is an employer-funded benefit program that reimburses employees for qualified medical expenses, providing 100% tax-deductible business expenses for employers. These arrangements require written plan documents, cover employees and their families, and transform personal medical costs into tax-advantaged employee benefits. Qualifying expenses include doctor visits, prescription medications, dental and vision care, and medical equipment. Reimbursements are tax-free to employees and exempt employers from payroll taxes. S Corporations and Partnerships can include business owners with proper structuring, while Schedule C businesses cover employees only.
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