A Health Reimbursement Arrangement, or HRA, is a triple tax-free benefit vehicle that helps you pay for eligible medical expenses* during retirement or active employment, using funds contributed by your employer. There is no limit on how much your employer contributes to your account, the account is in your name, and the funds never expire. Best of all, the funds can be invested for potential growth, and you’ll benefit from tax-free deposits, accumulation, and reimbursement.
The beauty of an HRA is the flexibility of plan design—there is an HRA application for the various stages of an employee’s life.
Let’s explore just how that HRA works for you if you’ve retired or separated from the employer sponsoring your HRA.
Retired or Separated from Service
Congratulations on taking this big step! You’ve worked hard for your benefits and now it’s time to let them work for you. Once you’ve retired or separated from service, you have access to your HRA funds. Whether you received a lump sum Retiree HRA (rHRA) contribution from your employer or the funds from your Defined Contribution HRA have now become available, you can start using your HRA to pay for qualified medical expenses tax-free! The rewards don’t stop there. Your HRA remains invested for potential growth so any funds in the account will continue to accrue interest.
What happens when I retire or separate from service?
Once you become claims-eligible and we receive your retirement or termination date from your employer, we’ll mail you a detailed Welcome Kit and Plan Highlights that contains additional details on how the HRA works for you now, how to submit claims and what expenses are eligible for reimbursement under your plan. Additionally, you’ll receive two debit cards** preloaded with your HRA balance. Both cards are in your name so you can keep one for yourself and offer one to an eligible spouse or dependent.
Using your HRA funds—fast facts!
- Medical expenses must be incurred after you retire or separate from service.
For example, if you had a doctor’s appointment or medical procedure while you were still working, that service wouldn’t be eligible for reimbursement since it was rendered before you become claims eligible. Claims are only reimbursable once you become claims eligible, which is the date you retire or separate from the employer sponsoring your HRA.
- Use your debit card or submit claims online when possible.
The fastest way to pay for your eligible medical expenses is with your Journey Benefits Debit Card, which eliminates out-of-pocket costs at the point-of-sale. Submitting your claim for reimbursement through myMidAmericaJourney.com or through your Journey mobile app are also two time-saving methods that can help you receive your reimbursement funds faster than ever.
- Review claims documentation examples—and hold onto your documentation!
Like many retirement and health care benefits, the HRA is regulated through the Internal Revenue Service (IRS). This means that, as your third-party administrator, MidAmerica must adhere to these IRS standards to make sure your plan stays protected and compliant. So, we may follow up and ask for further documentation to verify and approve your claim. The majority of benefits debit card purchases are automatically approved without additional documentation; however, in some rare cases, we may ask for documentation to complete debit card transactions as well. Visit myMidAmerica.com/hraresources for examples of different forms of accepted documentation.
Not sure if you have a Defined Contribution HRA or a Retiree HRA? Review the Plan Highlights FAQ that was included with your Welcome Letter and/or Welcome Kit. You can also call (855) 329-0095 or email us at [email protected]!
* Please note your employer will determine which medical expenses are eligible for reimbursement, so be sure to review your custom Plan Highlight FAQs.
**Please note if you have a defined contribution Health Reimbursement Arrangement (HRA) and are still actively employed, you will not receive a debit card until you retire or separate from service and become claims eligible. If you have a limited purpose HRA that only allows the reimbursement of deductibles, post-deductible expenses or coinsurance you will not receive debit cards but will have access to the online portal and mobile app to submit claims. Not sure what type of HRA you have? Contact our Participant Services team at [email protected] or (855) 329-0095.