Which entity primarily funds Health Reimbursement Arrangements?

Health Reimbursement Arrangements (HRAs) are primarily funded by employers. This type of account allows employers to provide tax-advantaged funds to reimburse employees for qualified medical expenses. The employer sets up the HRA and contributes funds that employees can then use to pay for health-related costs, promoting wellness and mitigating out-of-pocket expenses.

Employers have the flexibility to decide the contribution amounts and how the funds are used within the guidelines set by the IRS. This structure incentivizes employees to manage their healthcare expenditures more thoughtfully, as they can benefit from the reimbursements provided.

This makes employers the primary source of funding, clearly distinguishing HRAs from other types of health benefit plans that may involve contributions from employees, the government, or insurance providers.