The Complete Guide to HRA Eligible Expenses

A Heath Reimbursement Arrangement, HRA, is a popular employee benefit plan that allows employees to use pre-tax dollars to pay for qualified medical expenses and individual insurance premiums. HRAs are a great way for employers and employees to save on healthcare costs. How they work is once an employer decides on an HRA type and plan design, employees submit for reimbursement on qualified medical expenses. This guide will show you how to get the most out of your HRA by knowing the ins and outs of eligible HRA expenses. 

 

 

HRA Eligible Expenses

First, let’s understand the two most common types of HRAs and how they function. 

QSEHRA: The Qualified Small Employer Health Reimbursement Arrangement is designed for employers with less than 50 full-time employees. An employer has the flexibility to design the plan to cover either certain qualified medical expenses and/or individual health insurance premiums. 

ICHRA: The Individual Coverage Health Reimbursement Arrangement is for employees of any size; however, reimbursements must be used toward health insurance premiums purchased on the exchange. Depending on the employer, they may also opt to include certain qualified medical expenses for reimbursement in addition to the cost of premiums. 

How are HRA Qualified Medical Expenses determined? 

Qualified medical expenses for an HRA are those that would be eligible for reimbursement under a typical major medical plan. This includes deductibles, copayments, coinsurance, or out-of-pocket costs. In addition, qualified medical expenses for an HRA can also include dental and vision care expenses, as well as prescription drugs. The list of qualified medical expenses is determined by IRS; see IRS Publication 502.

What medical expenses can be reimbursed by an HRA?

Health Reimbursement Arrangements (HRAs) are designed to give employees more flexibility in managing their healthcare expenses. Understanding what is covered under an HRA is crucial for maximizing this benefit. Here’s a breakdown of the types of medical expenses typically eligible for reimbursement through an HRA.

Medical Care

HRAs typically cover various medical expenses, including visits to healthcare professionals, hospital services, lab tests, and preventive care. These expenses are considered HRA-eligible if necessary for disease diagnosis, cure, mitigation, treatment, or disease prevention. Expenses like doctor’s visit co-pays are also covered under most HRAs, answering the common question, “Does HRA cover copay?” with a yes.

Dental Care

Dental care is another category frequently covered by HRAs, encompassing services like dental checkups, cleanings, fillings, extractions, dentures, and orthodontics. These services must primarily alleviate or prevent a dental ailment or disease. Cosmetic dental procedures, however, are typically not considered HRA-qualified expenses unless they are necessary to treat a medical condition.

Vision Care

Vision care is also commonly reimbursable through an HRA. This includes expenses related to eye exams, prescription eyewear, contact lenses, and even corrective procedures like LASIK. If you’re wondering, “Can I use HRA for glasses?” the answer is generally yes, as long as a healthcare professional prescribes the glasses.

HRA Eligible Expenses: Comprehensive List

To expand upon the three primary categories above, here is a comprehensive list of HRA qualified expenses.

General Medical:

• Acne Medication and Treatments
• Acupuncture
• Addiction Treatment
• Ambulance (and other medical emergencies)
• Anesthesia (Including Dental, Medical, and Vision Treatments)
• Antacid
• Antibiotic Ointment
• Aspirin (or other pain relievers)
• Asthma Medicines or Treatment (over-the-counter)
• Bandages

Dental:

• Routine cleanings and dental exams
• Fillings, crowns, and dentures
• Orthodontic treatment, including braces
• Oral surgery and extractions

Vision:

• Eye exams and vision tests
• Prescription eyeglasses and contact lenses
• Laser eye surgery

Over-the-Counter:

• Canker and Cold Sore Treatment (over-the-counter)
• Cough Drops and Syrup
• Diaper Rash Creams (over-the-counter)
• Feminine Hygiene
• Lice Treatment (over-the-counter)

Specialty Services:

• Addiction Treatment
• Alcoholism Treatment
• Chiropractor
• Christian Science Practitioner
• Dermatologist
• Fertility Enhancement (in vitro fertilization and surgery)
• Mental Health Counseling
• Midwife
• OB/GYN
• Psychoanalyst
• Psychologist

Medical Devices:

• Artificial Limbs
• Artificial Teeth
• Blood Pressure Monitor
• Body Scans
• Breast Pump and Accessories
• Contact Lenses (including saline solution and enzyme cleaner)
• Crutches
• First Aid Kits
• Hearing Aids
• Oxygen Equipment
• Wheelchair

Procedures and Treatments:

• Adoption Related Medical Expenses
• Birth Control (including over-the-counter)
• Childbirth Classes
• COBRA Premiums (only reimbursable with a QSEHRA or ICHRA)
• Dental Surgery
• Medical Abortion
• Medical Operations
• Physical Therapy
• Sterilization
• Transplants
• Varicose Vein Removal Surgery
• Vasectomy

Miscellaneous:

• Braille Books and Magazines (exceed costs of regular printed editions)
• COBRA Premiums (Premiums are only reimbursable with a QSEHRA or ICHRA)
• Guide Dogs
• Hearing Aids
• Hospitalization
• Immunizations
• Incontinence Supplies
• Laboratory Fees
• Lactose Intolerance Medication
• Laxatives
• Learning Disability Treatments
• Legal Fees
• Lodging for Medical Care (including dental and vision care)
• Mastectomy-related Specialized Bras
• Medical Equipment and Repairs
• Medical Records Charges
• Medical X-Ray Charges
• Menstrual Care Products
• Nasal Sprays
• Nasal Strips
• Norplant Insertion or Removal
• Nursing Services
• Occlusal Guards (to prevent teeth grinding)
• Occupational Therapy
• Optometrist or Ophthalmologist Visits
• Ortho Keratotomy
• Orthodontia (braces and retainers)
• Orthopedic and Surgical Supports
• Orthotics
• Ovulation Monitor
• Oxygen
• Physical Exams
• Pregnancy Tests
• Prescription Drugs
• Psychiatric Care
• Radial Keratotomy
• Reading Glasses
• Sleeping Aids and Sedatives (over-the-counter)
• Spermicidals
• Splints and Support Braces
• Stop Smoking Programs
• Sunglasses (prescription)
• Sunscreen (SPF15+ and above)
• Therapy
• Transportation (related to healthcare)
• Tubal Ligation
• Urological Products
• Vaccinations
• Walking Aids
• Wart Removal Products
• Wound Care

HRA qualified expenses with a prescription or note from a doctor

Some qualified expenses need a prescription or a note from a doctor to be eligible for reimbursement.

Supplements and Nutritional Support:

• Alternative Dietary Supplements
• Dietary Supplements
• Medicated Toothpaste
• Nutritional Supplements
• Vitamins

Specialized Therapies and Treatments:

• Alternative Healers
• Breast Reconstruction Surgery (following mastectomy treatment for cancer)
• Cosmetic Procedures for Birth Defects/Injury
• Dermatology Products
• Doula Services
• Dyslexia Treatment
• Homeopathic Medicines
• Magnetic Therapy
• Massage Therapy
• Orthopedic Shoes and Inserts
• Swimming Therapy
• Transgender Treatments and Surgery
• Weight Loss Drugs (Doctor Supervised)
• Weight Loss Programs (Doctor Supervised)

Medical Devices and Services:

• Car Modifications (for medical conditions)
• Compression Socks
• Cord Blood Storage
• Exercise Equipment (for specific medical conditions)
• Fitness Programs (if prescribed for medical treatment)
• Home Modifications (for disability access)
• Humidifier (for respiratory conditions)

Professional and Supportive Services:

• Dental Veneers (if medically necessary)
• Dietitian Services
• Special Schooling for Mental and Physical Disabilities

Insurance Premiums 

There are many different kinds of insurance premiums. The IRS has also listed which premiums qualify as medical expenses. 

• COBRA Insurance Premiums
• Dental Insurance Premiums
• Health Insurance Premiums (including those purchased on the exchange)
• Long-term Care Premiums
• Medicaid/Chip Insurance Premiums
• Medicare Part A, Part B Insurance Premiums
• Medicare Supplement Insurance Premiums
• Multiplan Insurance Premiums
• Prescription Insurance Premiums
• Short Term Medical Insurance Premiums
• TRICARE Insurance Premiums
• Vision Insurance Premiums

What medical expenses CANNOT be reimbursed?

The IRS also guides what can’t be deducted as an HRA qualified medical expense. 

Non-Qualified Expenses:

• Personal and Family Services:
  • Adoption Fees
  • Childcare
  • Funeral Expenses
  • Marriage Counseling
• Insurance and Membership Fees:
  • Athletic Club Membership
  • Automobile Insurance Premiums
  • Cancer Insurance Premiums
• Cosmetic and Personal Care:
  • Cosmetics
  • Cosmetic Procedures (unless due to a medical condition)
  • Dental Floss
  • Electrolysis
  • Face Lift
  • Hair Regrowth Products
  • Hair Transplants
  • Hair Treatment (non-medical)
  • Hand Lotions
  • Teeth Bleaching
• General Health and Wellness:
  • Baby Powder
  • Diapers
  • Diaper Pails
  • Elderberry Supplements
  • General Vitamins (if not prescribed)
  • Lactation Items (over-the-counter)
  • Over-the-counter Dental Toothpaste
  • Sunscreen with less than SPF 15
  • UV Protection Clothing
  • Weight Loss Foods (for general health)
  • Weight Loss Programs (for general health)
• Miscellaneous:
  • Airborne/Vitamin C (if not prescribed)
  • Concierge Medical Fees (depends on the plan)
  • CPR Classes
  • Long-Term Care Services (typically not covered under HRAs)

Do you still have questions?

If you still have questions, Take Command’s platform allows employees to upload their eligible expenses for ease of approval and reimbursements. You can also chat with us on our website or email support@takecommandhealth.com. We’d be happy to help!

Frequently Asked Questions About HRA Eligible Expenses 

Navigating the specifics of Health Reimbursement Arrangements (HRAs) can often lead to questions about what can be covered. Below are answers to frequently asked questions that can help you understand the extent of your HRA coverage.

 

Can I Use my HRA for Glasses?

Yes, you can use your HRA for glasses. HRAs typically cover vision care, which includes prescription eyeglasses. You can submit the receipt to your HRA for reimbursement if you purchase prescription glasses. However, non-prescription sunglasses or cosmetic eyewear are generally not covered unless a medical professional prescribes them explicitly for a medical reason.

Does an HRA Cover Copay?

HRAs often cover copayments for office visits, prescriptions, and other healthcare services. If you have a copayment for a doctor’s visit or a medical procedure, you can submit that expense to your HRA for reimbursement. This can significantly reduce your out-of-pocket medical costs throughout the year.

Can I Use my HRA for Medical Travel?

Generally, you can use your HRA for medical travel expenses when such travel is primarily for and essential to receiving medical services. This can include transportation and lodging costs associated with medical care, such as a hospital stay or outpatient surgery. It’s important to keep detailed records and receipts of your travel expenses, and the travel must be a qualified medical expense as per IRS guidelines. Always check with your HRA plan administrator for specifics, as coverage for travel expenses can vary depending on the plan’s terms.

Does an HRA cover Dental Care?

Yes, HRAs typically cover dental care expenses. This includes routine dental cleanings, exams, fillings, and primary services like crowns, bridges, and root canals. Orthodontics and dentures are also generally covered. Cosmetic dental procedures, however, may not be eligible unless they are necessary for medical reasons.

Are Over-the-counter Medications Reimbursable?

Many over-the-counter (OTC) medications and health products are reimbursable with an HRA, provided you have a prescription from your healthcare provider. This includes OTC allergy medications, pain relievers, and first-aid supplies like bandages. Always retain the prescription and receipt for reimbursement purposes.

Updated for 2024