Interest in these arrangements is real but modest. In the KFF 2026 survey, 8% of covered workers had a plan offered with an HRA, and 61% of those workers could use the funds against cost sharing.
Confusion is common. Employers and employees mix up an HRA with insurance itself, an HSA, or a PPO. This guide walks through how an integrated HRA works, from group-plan enrollment to reimbursement.
Key Takeaways
- An integrated HRA is an employer-funded benefit that supplements a qualifying group health plan.
- Employees generally must be enrolled in the underlying group coverage to use it.
- Employers set the allowance, eligible expenses, documentation rules, and rollover terms.
- It reimburses out-of-pocket costs like deductibles and copays, generally not group-plan premiums.
What Is an Integrated HRA?
An integrated HRA is an employer-funded reimbursement arrangement designed to operate alongside a qualifying group health plan. You may also see it called a "group coverage HRA" or "GCHRA." Federal guidance does not define those terms separately; the official description is an HRA integrated with a group health plan.
The problem it solves
An employer can choose a group plan with manageable premiums, then use the HRA to help employees with deductibles, copayments, coinsurance, and other approved medical expenses.
What it is not
- The insurance policy: the group plan provides primary coverage
- A PPO: that is a plan or provider-network structure
- An HSA: the HRA is an employer-established benefit, not an employee-owned account
Core design rules
- Funded by the employer only. Employees cannot fund it through salary reduction.
- The employer sets the reimbursement maximum. There is no general federal contribution ceiling.
- Eligible expenses must be Section 213(d) medical care within the plan's terms.
- Carryover is permitted but not mandatory. Remaining amounts cannot become unrestricted cash.
Related arrangements
ICHRAs, QSEHRAs, and EBHRAs follow different rules:
- An ICHRA integrates with individual coverage
- A QSEHRA is for small employers that do not offer a group plan
- An EBHRA requires that group coverage be offered, but enrollment is not necessary, and it has a 2026 newly available amount limit of $2,200 (IRS Rev. Proc. 2025-19)
How Does an Integrated HRA Work?
The process runs in sequence:
- The employer selects the group plan
- The employer designs the HRA
- Employees incur eligible expenses
- Claims are documented and reviewed
- Approved amounts are reimbursed
Enrollment in the group health plan
Under IRS Notice 2013-54, there are two integration routes:
| Route | Coverage condition | Reimbursement scope |
|---|---|---|
| Minimum value not required | Employee enrolls in qualifying non-HRA group coverage, possibly another employer's plan | Group-plan copays, coinsurance, deductibles, premiums, and non-essential-benefit medical care |
| Minimum value required | Employee enrolls in minimum-value group coverage | Broader; qualified-expense and plan-term rules still apply |
Both routes limit HRA availability to employees enrolled in the requisite coverage. Employees must also be able to permanently opt out of future reimbursement at least annually. Remaining amounts at termination must be forfeited or subject to a permanent opt-out.
Eligibility for the group plan and eligibility for the HRA are separate questions. An employee who declines the group plan may need a different benefit arrangement.
Designing the HRA benefit
Employers decide:
- The reimbursement amount or limit
- Eligible expenses and when funds become available
- Whether balances roll over
- What documentation, such as an explanation of benefits (EOB), is required
Coordinate these choices with the group plan's deductible, copayments, coinsurance, and preventive-care rules. Nondiscrimination rules under IRC 105(h) apply to self-insured arrangements.
HSA strategy matters too. A general-purpose HRA generally prevents HSA contributions, while limited-purpose, post-deductible, and suspended HRAs can be compatible.
Incurring and documenting expenses
The employee receives care first, then submits proof. Every submitted expense must be substantiated. Typical information includes:
- The service or item
- Date of service
- Provider
- Amount
Self-certification alone is not enough. Plan administrators must handle protected health information carefully. Under HIPAA, an employer's access to PHI is limited to plan administration, never employment decisions.
Reviewing and reimbursing claims
The employer or third-party administrator checks that the expense is eligible, has not been reimbursed elsewhere, and fits within the employee's remaining allowance. Payment may come through payroll, direct deposit, check, or another approved method.
Under integration with a group plan, reimbursement centers on out-of-pocket costs. The HRA generally does not pay the employer's group premium.
Ongoing administration and compliance
Employers need written plan terms, participant communications, records, and processes for claims, appeals, rollover balances, and changes to the underlying group plan. Topics for professional review:
- ACA integration and premium tax credit effects
- ERISA plan documents and summary plan descriptions (generally due within 90 days of coverage starting)
- Form 5500 filing, generally required at 100 or more participants
- Tax treatment, reporting on Forms 1094/1095, and COBRA
- Nondiscrimination and HSA eligibility
Premium tax credits are a key reason for the opt-out rule: an HRA that counts as minimum essential coverage can preclude them.
Where Integrated HRAs Are Used
Employers often pair an HRA with a group plan that has higher employee cost sharing. An integrated HRA can also supplement other plan designs if eligible expenses are clearly defined.
Practical employee uses
Employees typically apply funds to deductibles, copayments, coinsurance, and other approved expenses the group plan does not fully pay. Because plans differ, direct employees to the plan documents rather than a universal list.
Keeping copies of EOBs supports smooth reimbursement. Administrators usually ask employees to submit an EOB with each claim.
Which employers find it useful
- Businesses wanting targeted cost-sharing support
- Employers aiming for more predictable benefit spending
- Companies strengthening their package without adding every medical expense to the group policy
SHRM describes how one workforce might target hospital and emergency costs while another targets prescriptions and office visits. Savings are not guaranteed. The right fit depends on workforce needs, budget, carrier rules, and compliance requirements.
Conclusion
The group health plan provides the primary coverage. The integrated HRA adds employer-funded reimbursement for approved expenses incurred by eligible, enrolled employees.
Review any arrangement with a qualified benefits adviser before implementing it. Muneris Benefits helps Virginia and West Virginia employers compare group health options, evaluate cost-management strategies, and coordinate compliance. The team also provides ongoing support for benefits questions, claims, and billing.
Frequently Asked Questions
What is an HRA?
An HRA is an employer-funded arrangement that reimburses eligible medical expenses under written plan rules. An integrated HRA works alongside an employer's group health insurance.
Can an HRA be used for health insurance premiums?
An integrated HRA generally focuses on out-of-pocket costs, not the premium for the employer's group plan. Some other HRA types, such as ICHRAs, can reimburse certain premiums under different rules.
Is an HRA better than an HSA?
Neither is better in every case. An HRA is employer-funded and employer-owned, with no unrestricted cash balance. An HSA stays with the employee (2026 limits: $4,400 self-only, $8,750 family), so the better fit depends on plan strategy and employee circumstances.
Is an HRA the same as a PPO?
No. An HRA is an employer-funded reimbursement benefit. A PPO is a health plan or provider-network structure, and an HRA can supplement a PPO plan.
What is a group health plan?
It is employer-sponsored coverage offered to a defined employee population. An integrated HRA works alongside the group plan, not instead of it.
