A Health Reimbursement Arrangement (HRA) is funded solely by which of the following?

A Health Reimbursement Arrangement (HRA) is designed to be an employer-funded account that reimburses employees for qualified medical expenses. The funding comes exclusively from the employer, allowing them to set aside tax-free dollars to help employees cover out-of-pocket health expenses. This funding structure incentivizes employers to contribute towards their employees' healthcare costs, promoting overall employee well-being and enhancing job satisfaction.

Understanding this structure helps clarify why other options do not apply. Employee contributions are not part of HRAs, as these arrangements are solely employer-funded. Insurance premiums pertain to payments made for health insurance and do not reflect the reimbursement mechanism of HRAs. Government grants are unrelated in this context, as HRAs are specifically employer-sponsored health benefits designed to support employees directly with their healthcare costs. Thus, it is clear that employer contributions uniquely define the operational nature of HRAs.