Health Reimbursement Arrangements (HRAs) for Employees
Give employees tax-free money for healthcare with an HRA. They choose their own health coverage, and you reimburse their medical expenses and premiums (if offering an Individual Coverage Health Reimbursement Arrangement or Qualified Small Employer Health Reimbursement Arrangement)
HRA Benefits for Employers
Cost-Effective Health Benefit
You decide how much to contribute to each employee's HRA account annually, giving you control over costs.
Alternative to Group Health Coverage
HRAs offer a cost-controlled alternative to traditional group health coverage, with no annual rate hikes.
Tax Advantages
Employer contributions are tax-deductible, and employee reimbursements for eligible claims are tax-free.
Flexible Plan Options
Customize plan features to fit your employees' needs and your budget.
Boost Your Benefits Package
Use an HRA to enhance your current benefits, attract top talent, and retain your team.
No Participation, No Problem
Unused benefits won’t impact your bottom line, offering peace of mind and flexibility.
How To Buy
Pick What Suits Your Business
Offer HRA alone or bundle it with other Paychex services for a more complete solution. HRA, HSA, and FSA are included in many of our payroll and HR packages.
Explore your options:
How To Get Started
Activate Your HRA
Collaborate with a Paychex representative to activate your HRA in Paychex Flex®
Decide What To Contribute
Decide how much you want to contribute to your account
Enroll Employees
Easily enroll employees through Paychex Flex®
See Our Benefits Administration Software in Action
Streamline benefits management with our software, fully integrated with Paychex Flex®. Whether you handle benefits in-house or outsource administration, we’re here to support you.
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HRA Frequently Asked Questions
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Who Owns the HRA?
Who Owns the HRA?
HRAs are administered and entirely funded by the employer.
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Does an HRA Come out of Employee Paychecks?
Does an HRA Come out of Employee Paychecks?
No, HRAs are 100% employer-funded and not deducted from paychecks. They are also exempt from payroll taxes.
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Can you cash out your HRA Account?
Can you cash out your HRA Account?
No, HRA funds can only be used for eligible expenses. Unused funds may roll over or remain with the employer.
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Do I Have to Have a Certain Number of Employees To Participate in a Health Reimbursement Account?
Do I Have to Have a Certain Number of Employees To Participate in a Health Reimbursement Account?
Employers of any size can offer an HRA. However, certain plans like a Qualified Small Employer Health Reimbursement Account (QSEHRA) are limited to employers with fewer than 50 employees who don’t offer a group health plan.
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How Much Can You Contribute to an HRA?
How Much Can You Contribute to an HRA?
Most HRAs don’t have contribution limits, but QSEHRAs have caps. In 2025, the limit is $6,350 for individuals and $12,800 for families.
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Do You Need Health Insurance in Order to Have an HRA?
Do You Need Health Insurance in Order to Have an HRA?
Depending on the type of HRA you may offer employees, you may also have to provide a traditional health plan before your employees can consider how to use HRA money.
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Can I Have an HRA and HSA?
Can I Have an HRA and HSA?
Health reimbursement accounts (HRAs) and health savings accounts (HSAs) benefit both employers and employees — offering tax savings for employers and affordable care for employees. But when comparing HRA vs HSA, there are key differences.
Can you offer both? Yes, if you provide a qualified high-deductible health plan (HDHP) alongside traditional health coverage. Consult your benefits specialist to determine if HRAs meet your business needs.
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Who Contributes to an HRA Account?
Who Contributes to an HRA Account?
An HRA account is funded solely by the employer. Employees do not contribute to an HRA; the employer determines the amount allocated to the account.
