Company HRA Tips (2026) | HSA Tracker
For W2 employees, self-employed individuals, and HR benefits managers navigating the complex world of employer-sponsored healthcare benefits, understanding the nuances of a company HRA is paramount, especially with the 2026 updates. Unlike Health Savings Accounts (HSAs), which are employee-owned and require a High Deductible Health Plan (HDHP), Health Reimbursement Arrangements (HRAs) are employer-funded and offer different flexibilities and limitations. This guide provides essential tips to help you discern the various types of company HRA plans, understand their unique rules, and make informed decisions about your healthcare spending and tax-advantaged savings for the upcoming year.
Quick Wins
Identify your specific company HRA type (QSEHRA, ICHRA, EBHRA) from your benefits package immediately.
Verify the 2026 contribution limits for your HRA type to understand your maximum reimbursement potential.
Confirm if your company HRA is compatible with an HSA to ensure you don't inadvertently jeopardize HSA eligibility.
Gather all medical receipts and submit HRA reimbursement claims promptly to avoid missing deadlines.
Review your HRA's eligible expense list to ensure you're maximizing all available reimbursements for qualified costs.
Understand Your HRA Type (QSEHRA, ICHRA, EBHRA)
High impactNot all HRAs are created equal. Knowing whether your employer offers a QSEHRA, ICHRA, or EBHRA is critical, as each has distinct rules, eligibility criteria, and reimbursement limits.
If your employer offers a QSEHRA, you'll be subject to a 2026 reimbursement limit of $6,450 for single coverage, which differs significantly from an ICHRA's unlimited potential.
Know the 2026 QSEHRA Limits
High impactFor small employers, QSEHRAs offer a way to reimburse employees for health expenses. Be aware of the maximum amounts your employer can contribute for 2026.
In 2026, if you're a single employee, your QSEHRA reimbursement cannot exceed $6,450. For families, the limit is $13,100. Track your reimbursements against these figures.
Grasp ICHRA Flexibility and Affordability
Medium impactICHRAs provide immense flexibility for employers of any size to offer health benefits, but they come with an affordability test for employees who choose marketplace plans.
Your ICHRA might cover a significant portion of your marketplace premium, but ensure the remaining premium doesn't exceed 8.39% of your household income for 2026 to be considered affordable.
Recognize the Excepted Benefit HRA Cap
Medium impactAn EBHRA is a limited type of HRA that typically covers specific benefits like dental, vision, or short-term, limited-duration insurance. It has a strict annual cap.
For 2026, your EBHRA can reimburse up to $2,200 annually. Plan your dental and vision expenses to maximize this benefit before the year ends.
Understand Employer-Only Funding
High impactA key characteristic of all company HRAs is that they are entirely employer-funded. Employees cannot contribute their own money, which impacts financial planning.
Unlike an HSA where you can contribute pre-tax dollars, your company HRA balance is solely determined by your employer's contribution. Factor this into your personal savings strategy.
Account for Non-Portability
High impactHRA funds are not portable; they are tied to your employment. This means if you change jobs, you typically lose any unused balance.
If you're considering a job change mid-year, try to utilize as much of your company HRA balance as possible for eligible expenses before your last day of employment.
Check HRA-HSA Compatibility
High impactHaving an HRA can impact your eligibility to contribute to an HSA. It's crucial to understand if your specific HRA design is compatible with HSA contributions.
If your company HRA reimburses general medical expenses before your HDHP deductible is met, you likely cannot contribute to an HSA. Confirm with your HR department.
Review Eligible Expenses Annually
Medium impactWhile HRAs generally cover IRS-qualified medical expenses, your employer defines the specific list of what is reimbursable under their plan. This list can change.
Some company HRA plans might cover mental health services or fitness programs, while others might be more restrictive. Always check your plan documents for the definitive list of eligible expenses.
Keep Detailed Records for Reimbursement
Low impactTo ensure smooth reimbursement from your company HRA, maintain meticulous records of all eligible medical expenses and receipts.
After a doctor's visit, immediately save the itemized bill and proof of payment. Submit these promptly to your HRA administrator to avoid delays or denials.
Understand Carryover Rules (or Lack Thereof)
Medium impactUnlike some FSAs, HRA funds often have specific rules about whether they can be carried over to the next plan year. Many HRAs are 'use-it-or-lose-it' or have limited carryover.
If your company HRA does not allow carryover of funds, plan to incur and submit all eligible expenses before the end of the plan year to maximize your benefit.
Utilize HRA Funds for Premiums (if applicable)
High impactCertain HRAs, like QSEHRA and ICHRA, can be used to reimburse health insurance premiums, which can significantly reduce your out-of-pocket costs for coverage.
If you purchase your own health insurance through the marketplace, your QSEHRA or ICHRA can reimburse you for those monthly premiums, effectively lowering your healthcare burden.
Leverage HRA for Family Coverage
Medium impactIf your company HRA offers family coverage, ensure you understand the specific limits and how eligible expenses for all family members can be reimbursed.
For a QSEHRA in 2026, the family limit is $13,100. Consolidate your family's eligible medical expenses to maximize this higher reimbursement amount.
Consider HRA as a Bridge to Retirement Healthcare
Low impactWhile not portable, some employers may offer HRAs as a post-retirement benefit to help former employees cover healthcare costs, though this is less common.
If your employer offers a retiree HRA, understand its terms and how it integrates with Medicare or other post-retirement health plans to manage future expenses.
Budget for Expenses Not Covered by HRA
Medium impactSince HRAs have limits and specific eligible expense lists, it's wise to budget for any medical costs that may fall outside your HRA's coverage or exceed its annual cap.
If your annual dental work exceeds your EBHRA's $2,200 limit, plan to cover the remaining cost from personal savings or another health account.
Stay Informed on IRS Updates
Low impactHealthcare regulations, including those for HRAs, can change. Keeping up-to-date with IRS guidance ensures you remain compliant and maximize your benefits.
The IRS frequently releases updates regarding contribution limits and eligible expenses. Periodically check official IRS publications or consult a financial advisor for the latest information
Review Your Explanation of Benefits (EOB)
Low impactBefore submitting HRA claims, cross-reference your medical bills with your Explanation of Benefits (EOB) from your health insurance to confirm covered amounts and patient responsibility.
An EOB will clearly show what your insurance paid and what you owe. Use this document, not just the provider's bill, to submit accurate reimbursement requests to your company HRA.
Educate HR Staff on HRA Nuances
High impactFor HR benefits managers, a deep understanding of each company HRA type and its specific rules is vital for effective administration and employee communication.
Conduct annual training sessions for HR staff covering the 2026 QSEHRA limits of $6,450/$13,100 and the distinct ICHRA affordability calculations.
Compare HRA vs. HSA in Total Compensation
Medium impactWhen evaluating job offers or annual benefits, consider your company HRA alongside other benefits like an HSA. They serve different purposes and have different long-term value.
A generous company HRA might cover immediate medical costs, but a robust employer contribution to an HSA provides a portable, investment-friendly account for future healthcare needs.
Pro Tips
Always clarify with your HR department if your company HRA design is compatible with an HSA, especially if you also have an HDHP, to avoid unintended tax penalties.
For self-employed individuals with QSEHRA, remember that your HRA reimbursement can be tax-free if you have minimum essential coverage, even if it's not an HDHP.
HR benefits managers should regularly review ICHRA affordability calculations, as they are dynamic and depend on marketplace plan costs, ensuring compliance year-over-year.
If offered an EBHRA, prioritize using its $2,200 annual limit for dental, vision, or other excepted benefits, as these funds are often 'use-it-or-lose-it' within the plan year.
Consider the non-portability of company HRA funds when evaluating job offers; a higher HRA contribution might not outweigh the long-term benefits of a portable HSA if you anticipate changing employers.
Frequently Asked Questions
What is a company HRA and how does it work?
A company HRA, or Health Reimbursement Arrangement, is an employer-funded plan that reimburses employees for qualified medical expenses and, in some cases, health insurance premiums. Unlike HSAs, employees cannot contribute to an HRA, and the funds typically remain with the employer if an employee leaves the company. The employer sets the terms, including what expenses are eligible for reimbursement and the maximum amount available, within IRS guidelines.
How does a company HRA differ from an HSA?
The primary differences between a company HRA and an HSA lie in funding, ownership, and eligibility. HRAs are solely employer-funded and are not portable; the funds are lost if you leave the job. HSAs can be funded by both employer and employee, are employee-owned, and are fully portable, meaning they move with you.
What are the 2026 contribution limits for different types of HRAs?
For 2026, the contribution limits vary by HRA type. The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) allows for a maximum reimbursement of $6,450 for single employees and $13,100 for families. The Excepted Benefit HRA (EBHRA) has an annual limit of $2,200. For Individual Coverage Health Reimbursement Arrangements (ICHRA), there are no federal contribution limits, but the amounts offered must meet affordability standards relative to marketplace plans.
Can I have both an HRA and an HSA simultaneously?
Generally, you cannot contribute to an HSA if you are covered by a company HRA that pays for medical expenses before your HDHP deductible is met. However, certain types of HRAs, such as limited-purpose HRAs (which only cover dental, vision, or preventive care) or post-deductible HRAs, can be compatible with an HSA.
Are company HRA funds portable if I leave my job?
No, company HRA funds are not portable. Unlike an HSA, which is owned by the employee and moves with them from job to job, an HRA is owned and funded by the employer. If you leave your job, any unused funds in your company HRA are typically forfeited back to the employer. This is a significant distinction that employees, especially those considering career changes, need to be aware of when evaluating their healthcare benefits.
What types of expenses are typically eligible for reimbursement through an HRA?
The types of expenses eligible for reimbursement through a company HRA are determined by the employer, but they generally follow IRS guidelines for qualified medical expenses. These can include doctor's visits, prescription medications, dental care, vision care, and even health insurance premiums in some HRA designs like QSEHRA or ICHRA.
How do recent IRS changes impact company HRAs for 2026?
Recent IRS amendments related to HRAs apply to plan years after 2024, which means they are relevant for 2026 plans. These changes primarily aim to clarify and streamline the rules for various HRA types, particularly concerning integration with other health coverage and affordability requirements. While specific details might evolve, the core structure and limits for QSEHRA, EBHRA, and ICHRA for 2026 are based on the updated guidance, ensuring greater clarity for employers and employees alike
Related Resources
More HSA Resources
Apply this tip now
Put HSA tips into action. Track every eligible expense and maximize your savings.
Track an Expense