Reap the benefits. Leave the tax.
Health Reimbursement Arrangement (HRA)
Employer-funded support for your healthcare expenses.
WHAT IT IS:
A Health Reimbursement Arrangement (HRA) is an employer-funded benefit that reimburses you for eligible healthcare expenses. An HRA is your employer’s promise to pay. In the video above, you’ll learn about your eligible expenses, annual allowance, and who helps manage your HRA funds.
KEY RULES (2026):
- Who Can Enroll: Employees eligible and enrolled in your company-sponsored health plan
- Who Funds Your HRA: 100% employer-funded
- Annual Employer Contribution: Set by your employer (no IRS maximum limit)
- Tax Advantage: Reimbursements or payments are not taxable when used for eligible medical expenses
- Rollover: Rollover rules are determined by your employer’s plan design
- Runout: Your plan may include a run-out period, giving you extra time after the plan year ends to submit claims for expenses incurred during that plan year.
Healthcare cost-sharing—even with insurance—can feel burdensome at times. Having a company-funded HRA helps offset out-of-pocket expenses throughout the year and adds real financial value and peace of mind to your benefits package.
Flexible Spending Account (FSA)
A simple way to save on healthcare expenses using pre-tax dollars.
WHAT IT IS:
A Flexible Spending Account (FSA) allows you to set aside pre-tax dollars from your paycheck to pay for eligible medical expenses throughout the year.
2026 IRS LIMITS
- Annual Maximum: $3,400
- Rollover: Up to $680 (if allowed by your employer’s plan)
A FEW RULES ON ELIGIBILITY:
- You must be eligible for and enrolled in your employer’s Healthcare FSA
- You do not need to be enrolled in a High Deductible Health Plan (HDHP)
- If you enroll in a Healthcare FSA, you generally cannot contribute to a Health Savings Account (HSA)
- Your Healthcare FSA is sponsored by your employer and is not individually owned
- Enrollment elections typically must be made during open enrollment or following a qualifying life event
PLAN YEAR, ROLLOVER & RUN-OUT
- Most FSAs follow a “use it or lose it” structure, so it’s a good idea to plan your election wisely
- To give you some added flexibility, you may be able to roll over a portion of unused funds into the next plan year, depending on plan design
- Your plan may also include a run-out period, which allows you additional time after the plan year ends to submit claims for expenses incurred during the prior plan year.
IRS GUIDANCE:
- For a full list of eligible medical, dental, and vision expenses, see IRS Publication 502: https://www.irs.gov/publications/p502
- For more information on FSAs, contribution limits, and tax rules, consult IRS Publication 969: https://www.irs.gov/publications/p969
An FSA makes budgeting for expected healthcare expenses easier while lowering your taxable income.
