Even the most comprehensive healthcare plans come with a lot of fine print. But if your employer offers a Health Reimbursement Arrangement (HRA), you’ve got one big advantage: the ability to get tax-free reimbursement for many of your out-of-pocket medical costs.
There’s just one catch: not everything counts.
This guide breaks down exactly what you can and can’t use an HRA for. We’ll walk you through eligible expenses—like doctor visits, prescriptions, dental care, and insurance premiums—and flag what’s not covered, like cosmetic procedures and gym memberships. We’ll also explain how different types of HRAs (QSEHRAs, ICHRAs, and traditional HRAs) handle reimbursements, and give you a step-by-step guide to actually submitting a claim.
What is an HRA—and how does it work?
A Health Reimbursement Arrangement (HRA) is an employer-funded benefit that lets you get reimbursed for certain health care expenses without paying tax on the money you receive.
Unlike a Health Savings Account (HSA) or Flexible Spending Account (FSA), you don’t own an HRA, and you don’t contribute to it. Instead, your employer sets the rules, funds the account, and approves reimbursements according to IRS guidelines (under IRS Publication 502) and the specifics of your HRA plan.
The basics:
Tax-free reimbursements for qualified expenses
Funded entirely by your employer
Not portable—you can’t take the funds with you if you leave your job.
Covers you, your spouse, and dependents (in most cases)
There are several types of HRAs, each with different use cases:
HRA Type | Best For |
---|---|
QSEHRA | Small businesses (fewer than 50 FTEs) |
ICHRA | Businesses of any size |
Traditional HRA | Larger employers |
Remember: the IRS determines what’s eligible, and your plan may set further rules within that scope.
What expenses are eligible for reimbursement?
The Internal Revenue Code defines eligible expenses broadly as costs incurred, among other things, for “the diagnosis, cure, mitigation, treatment, or prevention of disease.” But that doesn’t mean everything health-related qualifies.
Below, we’ve broken eligible expenses into categories to help you quickly find what applies to your situation.
Medical care and doctor visits
If you visit a doctor, specialist, clinic, or urgent care facility for a medical reason, you can likely get reimbursed. This includes:
Primary care visits
Specialist consultations (e.g., dermatology, orthopedics, neurology)
Urgent care and walk-in clinics
Telehealth or virtual visits
Diagnostic services (e.g., blood work, X-rays)
Reimbursable costs include: copayments, coinsurance, and out-of-pocket payments for medically necessary visits. If your provider is out-of-network and you pay upfront, that too is eligible.
Preventive checkups are also covered, even if you’re not sick. Annual physicals, vaccinations, and routine screenings fall under the IRS’s medical care definition.
Prescription medications
Most HRAs cover prescription drugs—whether they’re taken short-term (e.g., antibiotics) or long-term (e.g., insulin, antidepressants, birth control).
What qualifies:
Brand-name and generic medications prescribed by a doctor
Refills and maintenance meds
Insulin
What doesn’t: Over-the-counter meds like ibuprofen or antihistamines unless you have a written prescription from a doctor. The same rule applies to things like acid reducers, laxatives, and cold medicine.
Over-the-counter medications (with a prescription)
Thanks to the CARES Act (2020), certain OTC items are eligible again—but only if you get a prescription. Examples include:
Pain relievers (e.g., Advil, Tylenol)
Allergy medications (e.g., Claritin, Zyrtec)
Sleep aids
Cold and flu treatments
Heartburn and antacid meds
Some OTC items—like menstrual care products and COVID-19 test kits—no longer require a prescription. We’ll cover those in a later section.
Dental, vision, mental health, and more: other eligible expenses
HRAs cover way more than check-ups and prescriptions The IRS allows reimbursement for a range of services and items, including dental work, glasses, mental health treatment, menstrual care, and even medical devices you use at home.
Here’s what qualifies.
Dental care
Dental expenses are fully eligible for reimbursement, provided they’re for prevention, diagnosis, or treatment of dental disease, not purely cosmetic.
Covered:
Exams and cleanings
Fillings, crowns, and root canals
Extractions
Braces and retainers
Dentures and dental implants
X-rays
Periodontal treatment
Not covered:
Teeth whitening or cosmetic veneers
Over-the-counter whitening strips
Orthodontic treatments like braces can be reimbursed over time as payments are made, or in full with proper documentation depending on your plan.
Vision care
Vision expenses are also eligible, whether you need a routine eye exam or corrective treatment.
Covered:
Eye exams
Prescription eyeglasses and contact lenses
Lens solution and cleaning supplies
LASIK or other corrective eye surgeries
Vision therapy (if prescribed)
Not covered:
Non-prescription glasses or blue light blockers
Cosmetic contact lenses (e.g. color-changing lenses without prescription)
Mental health and therapy
Mental health care is eligible for reimbursement under IRS rules when the care constitutes treatment for disease or disability. Many employers now emphasize this as part of overall wellness. However, this is one area where it’s important to read the fine print. Coaching or general “wellness” support may not qualify unless medically necessary and provided by a credentialed therapist or clinician.
Menstrual care and reproductive health
Thanks to the CARES Act, menstrual care products were added to the list of eligible HRA expenses in 2020. These include:
Tampons
Pads and panty liners
Menstrual cups
Period underwear
Pain relief medications (with Rx) for menstrual symptoms
Also covered under reproductive care:
Fertility treatments (e.g., IVF, egg retrieval)
Pregnancy tests
Prenatal vitamins (with Rx)
Breast pumps and lactation assistance supplies
Yes, you can get reimbursed for the cost of freezing your eggs or sperm, as long as it's necessary to overcome inability to have children and your plan allows it.
Medical equipment and supplies
Durable medical equipment (DME) and related supplies are often overlooked but highly reimbursable when purchased for treatment of a medical condition. This is one of the broadest categories of eligible expenses.
Covered items include:
Crutches, wheelchairs, walkers
CPAP machines and supplies
Blood pressure monitors
Glucose meters and diabetic test strips
Insulin pumps and supplies
Hearing aids and batteries
Breast pumps
Bandages, gauze, and wound care supplies
Mobility aids
Orthopedic shoes (if prescribed)
Not covered:
Air purifiers
Mattresses or pillows (even if marketed for medical use)
General-use household items like thermometers or humidifiers, unless specifically prescribed
Keep prescriptions or doctor’s notes for medical equipment purchases, especially if the item could be considered general-purpose.
Health insurance premiums
Yes, some HRA types let you get reimbursed for monthly insurance premiums—but not all of them. Here’s the breakdown:
Premium Type | QSEHRA | ICHRA | Traditional HRA |
---|---|---|---|
Individual marketplace plan | ✅ Yes | ✅ Yes | ❌ Usually not |
Spouse’s employer plan | ✅ Yes | ❌ No | ✅ Yes, depending on HRA terms |
Medicare (Parts A, B, D) | ✅ Yes | ✅ Yes | ✅ Yes, in certain circumstances |
Dental/Vision premiums | ✅ Yes | ✅ Yes | ✅ Yes, depending on HRA terms |
If your plan reimburses premiums, you’ll usually submit a proof-of-payment statement each month or once per plan year.
If you’re unsure whether your HRA reimburses premiums, check your Summary Plan Description (SPD) or ask your HRA administrator.
Travel for medical care
Travel costs associated with necessary medical treatment can also be reimbursed, within limits.
Eligible costs:
Mileage for driving to medical appointments (at IRS rates)
Parking fees and tolls
Bus, train, or airfare (if no suitable care is available locally)
Hotel or lodging (up to $50 per night per person)
Not eligible:
Meals or entertainment
Travel for general wellness, checkups, or elective care
Companion’s expenses (unless required for care, e.g., a minor child)
You’ll need to log the mileage, date, and destination for each trip—some apps make this easier to track and submit.
Other reimbursable services
There are dozens of other items on the IRS-qualified list that people don’t realize they can claim. Here are a few you might not have thought of:
Smoking cessation programs
Weight loss programs (if prescribed for a medical condition)
Service animals and related care
Physical therapy
Acupuncture
Chiropractic services
Home modifications for medical reasons (e.g., ramps, handrails—with Rx)
Note: Many of these require documentation, especially prescriptions, physician letters, or invoices that describe the medical purpose.
What expenses are not eligible for HRA reimbursement?
Not everything health-adjacent qualifies. The IRS draws a firm line between medical care and general wellness, and many everyday expenses—even if they feel health-related—don’t count.
Here’s what’s typically not reimbursable:
Cosmetic procedures (e.g., Botox, teeth whitening, elective plastic surgery)
Gym memberships and fitness classes (unless prescribed and medically necessary)
Vitamins and supplements (unless prescribed to treat a specific condition)
Over-the-counter items without a prescription, including pain relievers, allergy meds, and cold remedies
Personal hygiene products (e.g., toothpaste, shampoo, deodorant)
Maternity clothes, diapers, and baby gear
Funeral expenses or life insurance premiums
General wellness apps or meditation subscriptions
Travel expenses not tied to treatment (e.g., vacation during recovery)
If an expense is primarily for comfort, appearance, or general wellness—not diagnosis, treatment, or prevention—it probably doesn’t qualify.
HRA types: how eligibility differs between QSEHRA, ICHRA, and traditional HRAs
Different HRAs have different rules. Some can reimburse premiums, others can’t. Some have dollar limits. Here’s how it breaks down:
QSEHRA (Qualified Small Employer HRA)
Who it’s for: Employers with fewer than 50 full-time employees Key features:
Annual reimbursement caps (set by the IRS)
Can reimburse individual health premiums + qualified medical expenses
Must be offered to all full-time employees on equal terms
Often used in place of traditional small group health plans
Unique eligibility notes:
Premiums for spouse plans are eligible
HSA compatibility requires a special setup
Reimbursements are reported on your W-2
ICHRA (Individual Coverage HRA)
Who it’s for: Employers of any size Key features:
No reimbursement cap (employer decides)
Can reimburse premiums only, expenses only, or both
Employers can offer different reimbursement rates by “employee class”
Must be paired with individual coverage (ACA or Medicare)
Unique eligibility notes:
Medicare and COBRA premiums are eligible
Great for remote/distributed teams
Not HSA-compatible unless structured for premiums-only
Traditional HRA
Who it’s for: Larger employers with group health plans Key features:
Often tied to the employer’s group insurance
Reimbursement rules vary widely
May have fewer options for individual customization
Not portable, not HSA-compatible
Unique eligibility notes:
May restrict reimbursements to deductibles and copays only
Always check your Summary Plan Description (SPD). The IRS sets the ceiling, but your employer decides how high they go.
How to get reimbursed: a step-by-step process
Getting your money back should be easy—and it is, if you know the steps.
Step 1: Know what’s covered
Start by reviewing your HRA’s eligible expenses. Use this guide, check your SPD, or use your HRA dashboard (like Thatch’s) to confirm eligibility.
Step 2: Pay for the expense
Use your personal funds (credit card, bank account) to pay the provider or purchase the item. Keep your receipts and any supporting documents (like a prescription or Explanation of Benefits).
Step 3: Submit your claim
Use your HRA platform to upload:
Proof of purchase (receipt or invoice)
Date of service
Type of service or item
Prescription or doctor’s note (if required)
Some platforms allow you to snap a photo; others may request a PDF or digital form.
Step 4: Get reimbursed
Once approved, the reimbursement will be issued—typically via direct deposit. Timing depends on your employer’s setup, but most reimbursements are processed within 5–10 business days.
Pro tips: how to get the most out of your HRA
Save your receipts: Create a digital folder and upload as you go. Don’t wait until the end of the year.
Batch your claims: Submitting multiple eligible expenses together reduces admin time and speeds up reimbursement.
Get Rx letters pre-approved: If you regularly buy OTC meds, ask your doctor for a standing prescription.
Submit early: Don’t wait until the deadline. Some HRAs have strict end-of-year or 90-day cutoffs.
Coordinate with your spouse: If you both have HRAs, make sure you’re not double-claiming the same expense.
Frequently asked questions
Can I use my HRA for my spouse or kids? Yes, most HRAs allow you to claim expenses for your spouse and tax dependents. Always check your plan rules to confirm.
Do I need a prescription for over-the-counter medications? Yes—unless the item is exempt (e.g. menstrual products, COVID tests). You’ll need a written prescription for pain relievers, allergy meds, etc.
Is massage therapy eligible? Only if prescribed for a medical condition by a licensed provider. A general spa day doesn’t count.
Can I use HRA funds for expenses from last year? It depends. Some HRAs allow a “run-out” period for submitting past-year claims (e.g. 60–90 days). Others don’t. Check your plan timeline.
Can I use both an HRA and an HSA? Maybe. QSEHRAs and ICHRAs can be made HSA-compatible—but not always. You can’t double-dip for the same expense.
How long does reimbursement take? Typically, 5–10 business days. Some administrators process faster (3-5 days with direct deposit, or even within 24 hours in some cases) while others take longer (up to 10-15 days for mailed checks).
Final takeaways
HRAs are some of the most flexible and tax-efficient ways to manage health care costs—but only if you know what’s eligible and how to claim it.
To recap:
Eligible expenses include: medical, dental, vision, mental health, insurance premiums, medical equipment, and more
Not covered: cosmetic procedures, general wellness, and non-medical personal items
Different HRAs cover different things—know your type
Submitting claims is easy—especially with a platform like Thatch
Staying organized helps you capture every dollar you’re owed
If your employer offers an HRA, use it. And if you're not sure what's eligible, bookmark this guide—you’ll be glad you did.