HRA

How Your Health Reimbursement Arrangement (HRA) Works

  • HRA contributions are tax-free to you.
  • You can use your HRA balance to pay for eligible health care expenses. The federal government determines the types of expenses that are eligible for reimbursement.
  • HRA contributions may roll over from year to year. You may use your HRA funds as long as you maintain active hourly eligibility and you are enrolled in the Smart Choices/Healthy Rewards plan.
  • Unlike a regular bank account, HRA contributions do not earn interest and can’t be invested.
  • You forfeit your HRA balance when your plan eligibility terminates for any reason; however, your HRA balance will be reinstated if you return to covered employment and re-establish plan eligibility within 12 months from the date your eligibility terminated.
Upon termination of coverage, you have the option to opt out of the HRA. This means that you will forfeit any remaining HRA balance and you will be able to apply for a premium assistance tax credit in a health insurance Marketplace. Whether you qualify for a tax credit will depend upon your eligibility under the rules of the Affordable Care Act. Please note: If you retain any balance in your HRA, you will not be eligible for the tax credit.

A Participant is permitted to permanently opt out of and waive future reimbursements from the HRA at least annually, in a time and manner determined by the Board of Trustees.  Upon termination from the Fund, the Participant may opt out of and waive future reimbursements from the HRA.  Please note that reinstatement of any HRA balances is not permitted if the Participant has opted out of HRA coverage.

  • When you retire, you forfeit your HRA balance at the same time your active eligibility terminates. This is typically one month after your retirement date.
  • The HRA has no cash value.
  • You may not participate in the HRA unless you are actually enrolled in a group health plan that provides minimum value pursuant to Internal Revenue Code Section 36B(c)(2)(C)(ii). A group health plan provides minimum value if the coverage is at least 60 percent of the actuarial value of a standard plan as determined by the IRS.
  • You are permitted to permanently opt out of and waive future reimbursements from the HRA at least annually, in a time and manner determined by the Board of Trustees, and upon termination of coverage under the plan.

 

Medical Care Expenses

You may use some or all of the money in your HRA Account to pay for services such as hospitalization, doctors and dentists, prescription drugs and amounts you pay for deductibles, copays or coinsurance, However, not all medical care expenses will be considered “Covered Expenses” that qualify for reimbursement under the Fund.  Generally, only expenses within the meaning of Section 213 of the Internal Revenue Code are eligible.

Common medical care expenses include: acupuncture, contraceptives, chiropractic services, contact lenses/eyeglasses, crutches, dental treatment but not teeth whitening, diabetic supplies, eye examination by an optometrist, device to measure blood pressure, fertility treatment, surgical dressing supplies, elastic bandages like an Ace wrap, hearing aids, immunizations and flu shots, laboratory tests, LASIK eye surgery, tobacco cessation drugs, orthodontia treatment/dental braces and walker/wheelchair and weight loss programs/weight loss drugs only if recommended by a Physician to treat a specific medical condition (e.g. diabetes, obesity, heart disease).

However, not all medical care expenses will be considered “Eligible Medical Care Expenses” that qualify for reimbursement under the Fund.  Generally, only medical care expenses within the meaning of Section 213 of the Internal Revenue Code are eligible.   If you have any questions as to whether an expense is reimbursable, call the Trust Fund Office at (800) 922-9902.

 

Excludable Expenses

The following expenses are examples of the kinds of expenses that are not reimbursable from your HRA account, as they do not meet the definition of “medical care” under Code Section 213.  This is not intended to be a complete list of all services that are not payable under the plan, but an example of more commonly submitted services that are not reimbursed from the plan. The plan does not pay for/reimburse any item that does not constitute “medical care” as defined under Internal Revenue Code Section 213.  Please note that if the HRA is used to reimburse expenses of a Domestic Partner or a child of a Domestic Partner that is not a tax dependent (that is, does not satisfy the requirements of a Dependent under IRS Code Section 152 (d) (1) and (d) (2) (H) without regard to the gross income limit), those payments will be considered imputed income to the Employee or Retiree.

  1. Health insurance premiums for individual policies or for any other group health plan including health insurance premiums for coverage that has been reimbursed under a Spouse’s plan. Premiums for individual health insurance whether purchased in the individual insurance marketplace, private exchange (except a retiree Medicare exchange), or public exchange such as in state or federal Health Insurance Marketplace.
  2. Long-term care (LTC) services.
  3. Cosmetic surgery/services, ear piercing, hair removal or other similar cosmetic procedures, unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. “Cosmetic surgery” means any procedure that is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.
  4. Funeral and burial expenses.
  5. Massage therapy to improve general health.
  6. Custodial care.
  7. Babysitting and child care expenses.
  8. Costs for sending a problem child to a school for benefits that the child may receive from the course of study and/or disciplinary methods.
  9. Health club or fitness program dues.
  10. Social activities, such as dance lessons and swimming lessons to improve general health.
  11. Cosmetics, toiletries, toothpaste, etc.
  12. Vitamins, food supplements, diet food, even if prescribed by a physician.
  13. Uniforms or special clothing, such as maternity clothing.
  14. Automobile insurance premiums.
  15. Transportation expenses except in certain circumstances where transportation is necessary to receive medical care.
  16. Marijuana and other controlled substances that are in violation of federal laws, even if prescribed by a physician.
  17. Premiums paid through salary reduction contributions under the terms of a Code Section 125 plan or any plan that provides for premium payment with pre-tax dollars.
  18. Over-the-Counter drugs and medicine unless prescribed by a health care provider or physician.

 

Reminder:  In no event are premiums for individual health insurance payable, whether purchased in the individual insurance market or in a Health Insurance Marketplace.