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Retiree Health Reimbursement Accounts FAQs

What is a retiree health reimbursement arrangement?

A retiree health reimbursement arrangement (RHRA) is a reimbursement account that’s set up and funded by your employer. The account may be used to reimburse your eligible out-of-pocket medical expenses you may have during retirement, and if allowed by your plan, eligible expenses for your spouse and qualified dependents. You can find specific plan information in the Summary Plan Description (SPD).

How does an RHRA work?

This is how an RHRA works:

  • Your employer sets up an RHRA for each retiree.
  • The RHRA account is funded entirely by your employer; you don’t contribute any money to your RHRA account.
  • Each plan year, your employer contributes a specified amount to each retiree’s RHRA. As long as there is money in your account, you can use the funds toward eligible expenses.

Depending on your employer’s plan design, you may roll over RHRA dollars that aren’t used during a plan year. Please refer to your Summary Plan Description (SPD) for specific details about your RHRA.

How do I benefit from an RHRA?

This account offers financial support from your employer to help pay for eligible health care expenses you may have during your retirement. You will appreciate your RHRA because you don’t pay taxes on the money in your account or your reimbursed expenses. 

What expenses are covered under an RHRA?

Only eligible expenses can be reimbursed under your RHRA. These expenses are defined by IRS rules and your employer’s plan. Learn more about eligible RHRA expenses by reading the Summary Plan Description (SPD).

Eligible expenses are those that you pay for out of your pocket for medical care that’s provided to you, your spouse, and eligible dependents. Generally, IRS rules state that medical care includes items and services that are meant to diagnose, cure, mitigate, treat, or prevent illness or disease. Transportation that is primarily for medical care is also included. Here are some examples:

  • Your health plan deductible (the amount you pay before your plan starts paying a share of your costs)
  • Your share of the cost for doctor’s office visits and prescription drugs
  • Your share of the cost for eligible dental care, including exams, X-rays, and cleanings
  • Your share of the cost for eligible vision care, including exams, eyeglasses, contact lenses, and laser eye surgery

Check out our Eligible Expenses page for more details.

Important: These are some other IRS rules you should know about:

  • Medicare premiums – Some RHRA plans allow qualified Medicare premiums as eligible expenses, so refer to your Summary Plan Description (SPD) for more information.
  • No double-dipping – Expenses reimbursed under your RHRA cannot be reimbursed under any other plan or program. Only your out-of-pocket health care expenses are eligible for reimbursement. Plus, expenses reimbursed under an RHRA may not be deducted when you file your tax return.
Are over-the-counter medicines eligible expenses?

Yes, if your plan allows them. However, OTC medicines now require a prescription to be an eligible RHRA expense. OTC medicines and drugs are no longer eligible for reimbursement under an RHRA unless prescribed by a doctor (or another person who can issue a prescription) in the state where you purchase the OTC medicines.

Any claim you submit for reimbursement that has an OTC medicine expense must include a Request for Reimbursement Form and one of the following types of supporting documentation:

  • A written or electronic OTC prescription along with an itemized cash register receipt that includes the merchant name, name of the OTC medicine or drug, purchase date, and amount
  • A printed pharmacy statement or receipt from a pharmacy that includes the patient’s name, the Rx number, the date the prescription was filled, and the amount

Allergy medication, aspirin and pain relievers, as well as first aid creams and ointments are examples of OTC medicines that require a prescription. Learn more on our Over-the-counter Expenses page.

Please Note: Prescription medicines and insulin (including over-the-counter insulin) aren’t affected by this change. You can follow the same process when buying these items and submitting claims.

What over-the-counter items are still eligible expenses?

The rules for over-the-counter items haven’t changed. If your plan allows, these items such Band-Aids and thermometers are still eligible for reimbursement through your RHRA. A detailed list of examples is on our Over-the-counter Expenses page.

What expenses are not covered under an RHRA?

Expenses that are not approved are called “ineligible expenses.” The expenses that are ineligible under a health FSA tend to be ineligible under an HRA, including:

  • Cosmetic surgery and procedures, including teeth whitening
  • Herbs, vitamins, and supplements used for general health
  • OTC medicines that you don’t have a prescription for (except insulin)
  • Family or marriage counseling
  • Personal use items such as toothpaste, shaving cream, and makeup
  • Prescription drugs imported from another country
  • Expenses that are reimbursed by another plan or program, including a health care plan
  • Any other item or service that isn’t used for medical care as defined by IRS rules

These are only a few of the examples of expenses that aren’t covered by an RHRA. Find a full list of eligible and ineligible expenses on our Eligible Expenses page.

How much does my employer put into my RHRA?

Your employer decides the maximum annual contribution amount for your plan. Refer to the Summary Plan Description (SPD) for this information.

What is an account cap?

Your RHRA plan may have an “account cap.” This amount is a limit (or cap) on the total balance that you can have in your RHRA at any given time. If you reach your account cap, your employer will not contribute any more money until the funds in your account are used and the balance falls below the cap. Your employer may also include an RHRA rollover maximum that limits the amount that you can carry over from one year to the next. These details can be found in your Summary Plan Description (SPD).

Important: Keep track of your real-time account balance and your HRA claims and payment activity through your online account.

What is the maximum amount I can be reimbursed by my RHRA?

The maximum reimbursement amount you can receive is equal to your account balance at the time your reimbursement request is processed. If your reimbursement request is more than the amount you have in your account, the unreimbursed portion will pend and then will process when your RHRA account balance can cover the expense(s).

Do I need to use the entire benefit amount during the coverage period?

Generally, RHRA funds are not forfeited at the end of the coverage period and may be rolled over into future years. However, the rollover feature is not available for all plans. If unavailable, most often you forfeit the funds in your account after the plan year. An RHRA balance cannot be cashed out, rolled over into another plan, or used for any purpose other than reimbursement of eligible medical expenses. Refer to your Summary Plan Description (SPD) to see if your plan offers the rollover feature.

How do I request reimbursement?

You must submit a completed and signed Request for Reimbursement Form along with appropriate proof of purchase for each product or service listed on your form.

Appropriate documentation includes:

  • For office visits – Your health plan's Explanation of Benefits (EOB) statement or an itemized receipt or bill from the provider that includes the patient's name, a description of the service, the original date of service, and your portion of the charge.
  • For prescription drugs – A pharmacy statement or receipt including the patient's name, the Rx number, the name of the drug, the date the prescription was filled, and the amount.
  • For over-the-counter medicines – A written or electronic OTC prescription along with an itemized cash register receipt that includes the merchant name, name of the OTC medicine or drug, purchase date, and amount, OR a printed pharmacy statement or receipt that includes the patient’s name, the Rx number, the date the prescription was filled, and the amount.
  • For over-the-counter health care-related products – An itemized cash register receipt with the merchant name, name of the item/product, date, and amount.
  • For qualified Medicare premiums – a copy of the insurance premium billing notice AND proof of payment (such as a copy of front and back of check, credit card confirmation, etc.) for qualified insurance policies. Itemized bills must include the name of the insurance provider, name of participant/insured, amount charged, and coverage dates.

Please Note: Credit card receipts, canceled checks, and balance forward statements do not meet the requirements for acceptable documentation unless submitted along with an insurance premium billing notice.

How often are reimbursements made?

Your employer chooses the reimbursement schedule. You can find out how often reimbursements are made by reading the Summary Plan Description.

Where can I get a reimbursement request form?

Just log in to your online account and find the form by clicking the “Forms” quick link.

Is there a deadline for submitting claims?

In most cases, yes, there is a time limit for filing claims. Find the answer for your plan by reviewing the Summary Plan Description (SPD). 

How do I keep track of my account activity?

Your HRA information is available anytime day or night by logging it to your online account.

What happens if the covered retiree passes away?

The answer depends on how your employer has set up the plan. Please thoroughly review your Summary Plan Description (SPD) for the further details.

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