H
R
A
(HRA)
LEARNING OBJECTIVES:
A. Understand health reimbursement arrangements
REVIEW:
This chapter begins by identifying that an HRA may be used as a substitute for health insurance or a supplement to a health insurance plan. HRA design features are discussed next. Tax implications include a discussion of nondiscrimination rules, Internal Revenue Code eligibility and coverage requirements, and COBRA continuation of coverage. The section providing references for learning more is preceded by a statement identifying an HRA as an ERISA welfare benefit plan. The chapter closes with a question and answer section, and a chart showing deductible and nondeductible medical expenses.
CHAPTER OUTLINE:
A. What Is It?
B. When Is It Indicated?
C. Design Features
D. Tax Implications
1. Nondiscrimination Rules
2. Internal Revenue Code Eligibility and Coverage Requirements
3. COBRA Continuation of Coverage
E. ERISA And Other Requirements
F. Where Can I Find Out More About It?
G. Questions And Answers
H. Chapter Endnotes
1

Chapter 48
FEATURED TOPICS:
Health reimbursement arrangements (HRAs)
FIGURES:
Figure 48.1 Deductible Medical Expenses
CFP® CERTIFICATION EXAMINATION TOPIC:
Topic 29: Group medical insurance
F. Savings accounts
3) Health reimbursement arrangement (HRA)
COMPETENCY:
Upon completion of this chapter, the student should be able to:
1 .
Understand health reimbursement arrangements
KEY WORDS: health reimbursement account (HRA), deductible medical expenses, nondeductible medical expenses
DISCUSSION:
1. Discuss situations in which an HRA might be used, and for what purposes.
2. Discuss nondiscrimination rules relevant to self-insured HRAs.
QUESTIONS:
1. Which of the following are often provided by insurance contracts used in conjunction with an HRA?
(1) administrative services
(2) claims evaluation
(3) stop-loss coverage
(4) HRA reimbursement coverage

Chapter 48 a. (1) only b. (1) and (2) only c. (1) (2) and (3) only d. (2) (3) and (4) only
Chapter 48, p. 369
2. Under which of the following situations must health care coverage under
COBRA be continued for 29 months (no more and no less)? a. termination due to disability b. termination due to gross misconduct c. divorce d. entitlement to Medicare benefits
Chapter 48, pp. 371, 372
3. Which one of the following types of HRA plans may be exempt from the nondiscrimination requirements of Code section 105(h)? a. welfare benefit plan HRAs b. substitute plan HRAs c. self-funded HRAs d. insured HRAs
Chapter 48, p. 372
4. Which of the following expenses have been approved for deduction under
Code Section 213?
(1) toothpaste
(2) acupuncture
(3) marriage counseling fees
(4) hair transplant operation a. (1) and (3) only b. (2) and (4) only c. (1) (2) and (3) only d. (2) (3) and (4) only
Chapter 48, pp. 410, 411

Chapter 48
ANSWERS:
1. c
2. a
3. d
4. b