Health Reimbursement Arrangements (HRAs)

Help employees pay for health expenses, while controlling your company’s costs. Simply Senior Solutions can help you compare HRA options and support your team’s experience.

What Is an HRA?

A Health Reimbursement Arrangement (HRA) is an employer-funded benefit that reimburses employees for qualifying medical expenses — including premiums, copays, deductibles, or other out-of-pocket costs.


  • HRAs are not insurance, but they offer a tax-advantaged way to help employees pay for healthcare.
  • Funds are 100% employer-funded; unused balances may roll over, depending on plan design.
  • You set the rules (within IRS and ACA guidelines), including contribution limits, reimbursement categories, and eligibility.


HRAs are especially useful for small businesses that want flexibility without committing to a group insurance plan.

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Two Popular Types of HRAs for Small Employers

ICHRA (Individual Coverage Health Reimbursement Arrangement)


The ICHRA  allows employers to reimburse employees for individual health insurance premiums and other eligible expenses, tax-free.


  • Employees must choose their own individual marketplace plan or private policy.
  • You set different allowance amounts for different classes of employees (e.g., full-time, part-time, seasonal).
  • Works well as an alternative to offering a traditional group plan.


Best for:
Employers of any size who want to offer health benefits without managing a group policy.


QSEHRA (Qualified Small Employer HRA)


Designed specifically for businesses with fewer than 50 full-time employees, a QSEHRA reimburses members for individual health insurance and out-of-pocket costs.


  • Employees must choose their own individual marketplace plan or private policy.
  • You must offer the QSEHRA uniformly to all eligible employees.
  • Annual contribution limits are set by the IRS and adjusted yearly.


Best for:
Small businesses looking for a simple, budget-friendly health benefit that meets ACA requirements.

Understanding the Differences Between QSEHRA and ICHRA

Feature QSEHRA (Qualified Small Employer HRA) ICHRA (Individual Coverage HRA)
Employer size Only for small employers with fewer than 50 full-time employees Available to employers of any size
Can offer group health insurance too? ❌ No — QSEHRA is only allowed if the employer does not offer group health insurance ✅ Yes — employers can offer ICHRA alongside group plans (but not to the same employee class)
Employee eligibility Must be offered to all full-time employees (some exceptions allowed) Can be offered to specific employee classes (e.g., part-time, seasonal, remote workers)
Use of funds Employees use funds to buy individual insurance or pay for qualified medical expenses Same — funds can be used for individual insurance premiums and medical expenses
Annual contribution limits ✅ Yes — IRS sets annual dollar limits (adjusted yearly) ❌ No set limit — employers decide how much to reimburse
Minimum coverage required? Employees must have minimum essential coverage (MEC) Employees must be enrolled in individual health insurance (on or off the ACA Marketplace)
Tax impact Reimbursements are tax-free if employees have MEC Same — tax-free if eligible coverage is in place

How We Can Help

At Simply Senior Solutions, we can help you set up and administer an HRA:


  • Compare options to find the best fit
  • Stay compliant with IRS and ACA rules
  • Help with employee onboarding and communication
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HRA

Frequently Asked Questions

  • Can I offer an HRA and a group plan?

    Sometimes. You can offer an ICHRA to some employee classes and a group plan to others — but not both options to the same individuals.

  • What happens to unused HRA funds?

    Some HRAs allow rollover of unused funds; others do not. We'll help design a plan that fits your goals.

  • Can employees use HRA funds for family coverage?

    Yes, if the HRA is set up to allow it. Employees can use funds to pay for premiums or care for themselves and eligible dependents.

  • Is an HRA the same as an HSA or FSA?

    No. Only the employer can fund an HRA, and there’s no employee contribution. It’s also more flexible in how it’s structured.