Accident & Health FundamentalsQuestion 19 of 315
A Health Reimbursement Arrangement (HRA) is most accurately described as:
a.A type of long-term care insurance contract
b.An optional rider that replaces COBRA coverage
c.An employer-funded, employer-owned arrangement that reimburses employees for qualifying medical expenses
d.An employee-funded savings account that earns interest like an HSA
Explanation
An HRA is funded solely by the employer (not by employee salary reductions) and is owned by the employer. It reimburses employees, tax-free, for qualified medical expenses up to the amount the employer allocates, under rules in IRC §105 and IRS guidance.
Law Reference: 26 U.S.C. §105; IRS Notice 2002-45 (HRA)Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)