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Health Reimbursement Account (HRA) Health Reimbursement Accounts (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the account.
DEFINITION of 'Health Reimbursement Account-HRA'. Employer-funded plans that reimburse employees for incurred medical expenses that are not covered by the company's standard insurance plan.Because the employer funds the plan, any distributions are considered tax deductible (to the employer). Reimbursement dollars received by the employee are generally tax free.The downside to HRAs is that companies may choose whether to start or fund such a plan.ecause the employer funds the plan, any distributions are considered tax deductible (to the employer). Reimbursement dollars received by the employee are generally tax free. The downside to HRAs is that companies may choose whether to start or fund such a plan.