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[quote=Anonymous]Notes to the EMPLOYEE from IRS 969
[b]Health Reimbursement Arrangements (HRAs) [/b]

A health reimbursement arrangement (HRA) must be funded solely by an employer. The contribution cannot be paid through a voluntary salary reduction agreement on the part of an employee. Employees are reimbursed tax free for qualified medical expenses up to a maximum dollar amount for a coverage period.

An HRA may be offered with other health plans, including FSAs.

Note. 
Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for HRAs on your income tax return.

For information on the interaction between an HRA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier.

[b]What are the benefits of an HRA?[/b] 
You may enjoy several benefits from having an HRA. Contributions made by your employer can be excluded from your gross income.

Reimbursements may be tax free if you pay qualified medical expenses. See Qualified medical expenses, later. Any unused amounts in the HRA can be carried forward for reimbursements in later years.

[b]Qualifying for an HRA[/b] 
HRAs are employer-established benefit plans. These may be offered in conjunction with other employer-provided health benefits. Employers have complete flexibility to offer various combinations of benefits in designing their plan. 
Self-employed persons are not eligible for an HRA.

[b]Contributions to an HRA [/b]
HRAs are funded solely through employer contributions and may not be funded through employee salary deferrals under a cafeteria plan. These contributions are not included in the employee's income. You do not pay federal income taxes or employment taxes on amounts your employer contributes to the HRA.

Amount of Contribution There is no limit on the amount of money your employer can contribute to the accounts. Additionally, the maximum reimbursement amount credited under the HRA in the future may be increased or decreased by amounts not previously used.

[b]Distributions From an HRA [/b]
Generally, distributions from an HRA must be paid to reimburse you for qualified medical expenses you have incurred. The expense must have been incurred on or after the date you are enrolled in the HRA. Debit cards, credit cards, and stored value cards given to you by your employer can be used to reimburse participants in an HRA. If the use of these cards meets certain substantiation methods, you may not have to provide additional information to the HRA.

[b]Qualified medical expenses from your HRA include the following. [/b]
Amounts paid for health insurance premiums. 
Amounts paid for long-term care coverage. 
Amounts that are not covered under another health plan
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