Guides · For employers

What is a health reimbursement arrangement (HRA)?

A health reimbursement arrangement (HRA) is an employer-funded benefit that reimburses employees tax-free for qualified medical expenses, up to a dollar amount the employer sets for each coverage period. Only the employer puts money in, employees can't contribute, and self-employed people can't have one for themselves.

There are four main types. Two let small employers skip a group plan entirely (the QSEHRA and the ICHRA, now called a CHOICE Arrangement on HealthCare.gov). Two sit alongside a group plan (the integrated HRA and the excepted benefit HRA).

Updated · Facts checked against the sources listed below

How an HRA works

  • Employer-funded only. IRS Publication 969 says HRAs are funded solely through employer contributions, with no salary reduction.
  • Tax-free. Employer contributions aren't counted as employee income, and reimbursements for qualified medical expenses aren't taxed.
  • The plan sets the rules. Qualified expenses are those the plan names. They generally match what counts for the medical expense deduction, and HRAs can also pay health insurance premiums.
  • Unused money depends on the plan. Some HRAs carry balances to the next year; some don't. If a plan lets unused money be paid out as cash, Publication 969 says HRA payments become taxable.

The four main types of HRA

From HealthCare.gov's HRA guide, IRS Rev. Proc. 2025-19 (excepted benefit HRA) and Rev. Proc. 2025-32 (QSEHRA), checked October 2026.
TypeWho can offer it2026 limitWhat it pays for
ICHRA (CHOICE Arrangement)Any size employer, instead of or alongside a group plan for other classesNo federal minimum or maximumIndividual premiums (Marketplace, off-Marketplace or Medicare) and medical costs
QSEHRAFewer than 50 full-time employees, no group plan$6,450 self-only, $13,100 familyPremiums and medical costs for employees with minimum essential coverage
Integrated (group-coupled) HRAEmployers that offer a group health planSet by the employerQualified medical expenses the plan names, for people enrolled in the group plan
Excepted benefit HRAEmployers that offer a group health plan$2,200 for plan years beginning in 2026Qualified medical costs the plan names; not individual or group health premiums or Medicare premiums

Deep dives: ICHRA, QSEHRA, and ICHRA vs QSEHRA.

HRA vs HSA

HSA limits from IRS Rev. Proc. 2025-19. HRA and HSA rules from IRS Publication 969.
HRAHSA
Who owns itThe employerThe employee
Who can put money inEmployer onlyEmployee, employer or anyone on the employee's behalf
Health plan requiredDepends on the type (group plan, individual coverage or minimum essential coverage)An HSA-eligible high deductible health plan
2026 limitDepends on the type (see above)$4,400 self-only, $8,750 family
If you leave the jobMoney generally stays with the employerThe account and money go with you

Having a general HRA usually blocks HSA contributions. Publication 969 lists exceptions: a limited-purpose HRA (such as dental and vision), a suspended HRA, a post-deductible HRA, and a retiree-only HRA. Check with your plan administrator or a tax advisor. See what is HSA eligible and HSA vs FSA.

If your employer offers an HRA

  1. Read your notice. It tells you the amount, the start date and what coverage you need.
  2. Get the right coverage. An ICHRA needs individual coverage or Medicare. A QSEHRA needs minimum essential coverage. Integrated and excepted benefit HRAs come with a group plan offer.
  3. Check premium tax credits. An ICHRA or QSEHRA can reduce or end your Marketplace credit. See premium tax credit.
  4. Keep receipts. You pay first and submit proof to be reimbursed.

Where Gabriel fits

Employees with an ICHRA or QSEHRA who need an individual plan can compare Marketplace quotes with Gabriel and open their own application with a licensed agent in most states. Employers with 25 or more employees can add Gabriel for Teams, a care membership, alongside a health plan. It is not group health insurance and not an HRA, it doesn't replace a health plan, and it never satisfies the ACA employer mandate.

Gabriel is not an insurer. Health insurance quotes and enrollment are handled by Gabriel Labs, Gabriel's separately licensed insurance agency. For plan design or tax questions, ask a benefits attorney or tax advisor.

Common questions

What does HRA stand for in health insurance?

Health reimbursement arrangement. It's an employer-funded account that reimburses employees tax-free for qualified medical expenses up to a set amount.

Can employees contribute to an HRA?

No. IRS Publication 969 says HRAs are funded solely by employer contributions.

What happens to HRA money when I leave my job?

It generally stays with the employer. Some plans let balances carry over from year to year. If a plan pays unused money out as cash, those HRA payments become taxable.

Can I have an HRA and an HSA?

Usually not with a general HRA. Exceptions include limited-purpose, suspended, post-deductible and retiree-only HRAs. Check with your plan administrator.

What is the excepted benefit HRA limit for 2026?

$2,200 for plan years beginning in 2026, under IRS Rev. Proc. 2025-19.

Can a self-employed person have an HRA?

Not for themselves. Publication 969 says self-employed persons aren't eligible for HRAs. See self-employed health insurance.

Sources

  1. Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans (2025) IRS
  2. Health Reimbursement Arrangements (HRAs) IRS
  3. Find the right HRA for your business HealthCare.gov
  4. Rev. Proc. 2025-19: 2026 HSA and excepted benefit HRA amounts IRS
  5. Rev. Proc. 2025-32: 2026 inflation-adjusted items (section 4.63) IRS

This guide is general information, not medical advice. It does not replace a visit with a licensed clinician. Gabriel membership is not health insurance.