The Health Reimbursement Arrangement, or HRA, is like an "expense account" to pay for health care expenses your plan doesn't cover. Your employer chooses how much goes into the account. It's usually paired with a health plan, like a PPO plan, with a high deductible (though not necessarily the type of plan you need for a Health Savings Account).

Typically, you can start spending HRA money on items approved by your employer and the IRS starting on the first day of the plan year. The list of eligible expenses usually includes:

• Doctor's office visits
• Dental services
• Eye exams, eyeglasses, contact lenses and solution, and laser surgery
• Hearing aids
• Orthodontia, dental cleanings, and fillings
• Prescription drugs and some over-the-counter items
• Physical therapy, speech therapy, and chiropractic expenses

Your employer's list may include other items on the IRS list of medical expenses.

If you don't use all the money in your account, you can typically save the remainder for next year, as long as you enroll in the same type plan with the same employer. If you use all of the money in your account, you pay any additional health care expenses you have until you meet your health plan deductible. With this kind of plan, your deductible is often higher than with other plans.

HRA advantages
Choosing a plan that includes an HRA gives you choice and flexibility in how you pay for health care:

• Reduce your deductible without paying your own money. Some of the HRA funds you spend apply to your deductible – so you're reducing the deductible with funds supplied by your employer.
• Carry over unused dollars. If you have funds left over at the end of the plan year, you may be able to keep them for next year as long as you have the same type of plan with the same employer.
• It's easy to use. With many HRAs, you don't have to file claim forms to spend the money. You can just swipe a special debit card to pay directly from your account.
• Use it for costs beyond your health plan. Besides using your HRA for out-of-pocket costs specified in your plan, like medical and pharmacy copayments, you can spend HRA funds on other expenses your employer allows – for example, vision care and dental services.