In June 2019, the Departments of Treasury, Labor and Health and Human Services jointly published a final rule to expand the flexibility and use of health reimbursement arrangements (HRAs). An HRA is a group health plan funded solely by employer contributions that reimburses an employee’s medical care expenses up to a maximum dollar amount for a coverage period. HRA reimbursements are excludable from the employee’s income and wages for federal income tax and employment tax purposes. In addition to the employee, an HRA may also reimburse expenses incurred by the employee’s spouse, dependents, and children who as of the end of the taxable year, have not attained age 27.
