Your Health Reimbursement Account Options
This article applies to you if you're retiring and not yet eligible for Medicare.
A Health Reimbursement Account (HRA) is for people who are retiring. Your former employer funds and owns the account. They may refer to your HRA with a different name, such as RRA, RMA, ARA, or RMC.
If your former employer or benefits provider offers you an HRA, your former employer determines what expenses your HRA reimburses. Most former employers allow reimbursement of your insurance premiums. Some former employers also allow for some or all of the 213(d) Eligible Medical Expenses. The HRA reimburses you up to a maximum dollar amount that your former employer makes available each year. You must incur an expense before you can be reimbursed for it.
When you enroll, you have to decide whether to opt in to your HRA or to use a Premium Tax Credit (PTC).
For example, your spouse is on Medicare and has an HRA, and you aren't Medicare eligible. Because you're able to submit claims on your spouse’s HRA, you're unable to take the PTC. The IRS considers your spouse’s HRA to be employer coverage, and that prevents you from taking a PTC.
If your household takes both the HRA and a PTC, you're required to pay back the PTC you received on your tax return.
If you elect to use your HRA, you can still enroll in a qualified health plan (QHP) on the health insurance marketplace. However, you can’t apply a PTC to your chosen plan.
