How to File an HRA Claim in Daniel Stewart

An HRA, or health reimbursement account, is an employer-sponsored health benefit. It can reimburse employees for qualified expenses, making healthcare costs a little more manageable. These accounts are similar to health savings accounts (HSAs), but they’re funded by employers rather than through individual contributions.

While HRAs can be beneficial, they do come with a few minor headaches. The biggest? For most people, it’s filing a claim.

Filing an HRA Claim

HRAs are heavily regulated through the IRS. That’s one thing they share with a standard HSA. However, beneficiaries must go through more hoops than the IRS to process a claim.

Most employers go to third-party administrators to handle claims. Administrators take care of the logistics and ensure proper compliance will all laws and regulations. That means that filing a claim involves a lot of paperwork!

The biggest argument in the HSA vs HRA debate is how money moves. An HRA works through reimbursements. Employees must pay for the qualified expenses out of pocket before they can file their claims. After waiting for approval, the funds are usually reimbursed through a non-taxable line on an upcoming paycheck.

Filing a claim is one of the more complex pieces of the puzzle. Accurate documentation is paramount; employees must go through the administrator to get the ball rolling. Documentation must provide irrefutable proof about when the expense occurred, where the employee received care, what medical expenses they incurred, and how much it cost.

Once the employee provides that information, the administrator files the claim and ensures that the expenses qualify under IRS standards. If they don’t, the claim is rejected, and the employee doesn’t get reimbursed.

HSA vs HRA

There’s a big difference in simplicity when using these accounts. Getting reimbursed with an HRA involves many hoops. That’s not the case with an HSA.

Most HSA administrators provide a debit card. You can use the card for all qualified medical expenses on the spot. If something doesn’t qualify, you must pay its taxes. But there are no strict approval processes or waiting.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years’ experience in business finance. You can find his thoughts at HSA strategy blog.