Accident & Health FundamentalsQuestion 19 of 315
A Health Reimbursement Arrangement (HRA) is most accurately described as:
a.An employer-funded, employer-owned arrangement that reimburses employees for qualifying medical expenses
b.An employee-funded savings account that earns interest like an HSA
c.An optional rider that replaces COBRA coverage
d.A type of long-term care insurance contract
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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