2022 HRA Compliance Checklist - Zupnick Associates

(by: Eseoghene Andre)


There are many HRA Compliance Checklists to be found on the internet, for 2022, but (likely) none as simple as are ours.

Staying up to date with constantly changing regulations within Health Reimbursement Arrangements (HRA) compliance can be very tricky, especially with global political tides directly affecting the proceedings. It is more important than ever for HR Personnel, CEOs, and benefits administrators to be prepared with as many resources as possible. 


What Is An HRA?

A Health Reimbursement Arrangement (HRA), also known as a Health Reimbursement Account, is a tax-favored program that can be used in conjunction with a health plan. Individual coverage HRAs (ICHRA) and qualified small employer HRAs (QSEHRA) are the two basic kinds of HRAs.


HRAs can be used with any type of health plan. However, they are most commonly used in combination with a High Deductible Health Plan (HDHP). This combination allows an employer to fund individual Health Reimbursement Accounts for employees using premium savings realized by switching from a low-deductible health plan to a more cost-effective high-deductible plan. An HRA can be offered to employees by any type of firm, regardless of size. 


There are some rules and regulations that guide HRAs. They help to ensure that all employees get equal and fair benefits from this health insurance, and below are the basics.


Benefits Of An HRA For Your Business

We know the benefits of HRA plans for employees but why is it important to you as an employer?  Well, here are a few benefits.

  • When you go from a low-deductible health plan to a high-deductible health plan, you save money on your health insurance premium.
  • Your savings could be even greater if your employees have lower medical expenses than the amount you put into their HRA.
  • You may be able to save money at renewal because employees will be more motivated to make more educated decisions regarding their health care.
  • Tax deductions are available for reimbursements.
  • You do not need to fund your HRA account ahead of time. When medical expenses arise, reimbursements can be made from your company’s general account, giving you more control over your financial flow.

HRA Compliance Rules And Regulations

To prevent conflicts between employer and employee, these are the regulations in place:

  1. To be eligible for an HRA, employees may need health insurance.
  2. The HRA is owned by the company.
  3. The HRA can only be funded by the company.
  4. Employees who decline group health care coverage can participate in an excepted benefit HRA, but they cannot use the funds to purchase comprehensive health insurance.
  5. HRA rollover is determined by the type of HRA and the company’s decision to enable it.
  6. All workers in the same employee class must receive the same amount of funding. The amount of money put into the HRA is decided by the company.
  7. However, employees with dependents can receive higher amounts. This means that HRA funds can be used to cover medical expenses for family members.
  8. Interest is not paid on HRA money.
  9. In IRS Publication 502, it is stated that HRAs can compensate for anything.
  10. The maximum amount of reimbursement is determined by the type of HRA.
  11. Unused HRA funds belong to the employer.
  12. HRAs may not be funded indirectly through a cafeteria plan. 

HRA Compliance Checklist

Now that you’re ready to  draft a compliant HRA plan for your employees, note some  of the most important areas that you and your employees must have an in-depth understanding of. Here are all the things that a compliant HRA must include:


Building An HRA Compliant Plan
  • The basic definition of the kind of plan you are making available to your employees. i.e Stand-alone HRAs, Integrated HRAs, or any of the likes
  • Explain the eligibility requirements. Remember, all employees are eligible except for some cases where some classes of employees are excluded
  • Discuss funding differences. i.e Employees with dependents are subject to a higher amount
  • Discuss individuals that are not allowed to participate in this benefit
  • Also, discuss what happens to used funds
  • Discuss the terms of reimbursement, clearly stating what is refundable and what is not.
  • Non-discrimination requirements
  • Carefully consider the impacts of federal laws on the agreement plan that you are choosing
  • Discuss implementation issues


This checklist will only help to serve as a guide on what your employee group health HRA plan must contain.  You can contact your (new!)  insurance broker to help you come up with a comprehensive HRA plan for your employees. State and federal regulations can sneak up on the best of us. Get in touch today.


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