Health Reimbursement Arrangement (HRA) Calculator

Enter your HRA budget, prior reimbursements, and current eligible expenses to calculate your approved reimbursement, remaining balance, utilization rate, and out-of-pocket responsibility.

Created by Luis GonzalezLast updated: June 28, 2026

How to Use This Calculator

1
Enter Your Total HRA Budget
Input the total amount of funds allocated to your Health Reimbursement Arrangement for the current year by your employer.
2
Provide Your Total Reimbursed Amount
Enter the cumulative amount you have already successfully claimed and received reimbursement for from your HRA this year.
3
Specify Your Reimbursement Request Amount
Input the specific amount you are currently requesting to be reimbursed for eligible medical expenses.
4
Enter Your Eligible Expenses
Input the total amount of medical expenses that qualify for reimbursement under your HRA plan, for which you are seeking reimbursement.
5
Review Your HRA Results
The calculator displays four result cards — Remaining Budget, Reimbursement Amount, Budget Utilization, and Out-of-Pocket Cost — plus an insights panel with a breakdown bar showing how your HRA funds are allocated across previously reimbursed, current request, and remaining budget.

Example Calculation

An employee has a total HRA budget of $2,500, has already been reimbursed $1,200, and is requesting $500 for newly incurred eligible expenses totaling $600.

Total HRA Budget ($)

2,500

Total Reimbursed ($)

1,200

Reimbursement Request Amount ($)

500

Eligible Expenses ($)

600

Results

Remaining Budget

$800

Reimbursement Amount

$600

Budget Utilization

68.0%

Out-of-Pocket Cost

Insights card shows HRA budget allocation breakdown and tax-free benefit value.

Tips

Track Your HRA Balance Regularly

Keep a close eye on your 'Remaining Budget' throughout the year. This helps you plan future medical expenses and ensure you utilize your full employer-provided benefit, which can be thousands of dollars annually.

Understand Eligible Expenses

Familiarize yourself with your specific HRA plan's eligible expenses. Common items include deductibles, copayments, prescription drugs, and vision/dental care, but plans vary. Maximize your reimbursements by only submitting qualifying costs.

Submit Claims Promptly

Don't delay submitting reimbursement requests. While some HRAs allow funds to roll over, many operate on a 'use it or lose it' basis annually. Prompt submission ensures you don't miss out on your allocated funds.

Consider the Tax-Free Advantage

HRA reimbursements are tax-free, meaning $1,700 in reimbursements at a 30% marginal tax rate is effectively worth $2,210 in pre-tax income. Factor this into your overall compensation analysis when comparing job offers or evaluating your benefits package.

Managing Your Health Reimbursement Arrangement (HRA) Funds

The Health Reimbursement Arrangement (HRA) Calculator provides a clear snapshot of your HRA funds, helping you track your remaining budget, current reimbursement amounts, budget utilization rate, and out-of-pocket costs.

This tool is invaluable for employees managing their healthcare expenses, ensuring they maximize their employer-provided benefits.

HRAs are a tax-advantaged way for employers to help cover medical costs, with typical annual budgets ranging from $1,000 to $5,000 for individual plans in 2026.

The Financial Flow of HRA Reimbursements

This calculator helps you understand the immediate impact of your reimbursement requests on your available HRA funds.

It focuses on how much budget remains, the actual amount you can expect to be reimbursed, your overall budget utilization percentage, and any out-of-pocket costs you may need to cover.

The core calculations are straightforward:

Remaining Budget = Total HRA Budget - (Total Reimbursed + Reimbursement Request Amount)
Reimbursement Amount = MIN(Eligible Expenses, Remaining Budget)
Budget Utilization = (Total Reimbursed + Reimbursement Request Amount) / Total HRA Budget x 100
Out-of-Pocket Cost = MAX(Eligible Expenses - Reimbursement Amount, 0)

The Remaining Budget reflects the funds available after accounting for all previous reimbursements and your current request.

The Reimbursement Amount ensures you only get reimbursed for actual eligible expenses, up to the amount still available in your budget.

The Budget Utilization percentage shows how much of your annual HRA allocation has been consumed, and Out-of-Pocket Cost reveals any gap between your eligible expenses and what the HRA will cover.

💡 To understand the employer's share of your overall health benefits, including HRA contributions, our Health Insurance Employer Contribution Calculator can provide a detailed financial breakdown.

Processing an HRA Reimbursement Request

Consider an employee with a total annual HRA budget of $2,500.

They have already received $1,200 in reimbursements this year.

Now, they are submitting a new request for $500, with eligible medical expenses totaling $600.

Let's calculate their HRA status:

Calculate Remaining Budget: $2,500 (Total Budget) - ($1,200 + $500) = $800.
Determine Reimbursement Amount: Compare the Eligible Expenses ($600) with the Remaining Budget ($800). Since $600 is less than $800, the full eligible amount will be reimbursed: MIN($600, $800) = $600.
Calculate Budget Utilization: ($1,200 + $500) / $2,500 x 100 = 68.0%.
Calculate Out-of-Pocket Cost: MAX($600 - $600, 0) = $0. All eligible expenses are covered.

In this scenario, the employee's remaining budget after this request is $800, they will receive a reimbursement of $600 for their eligible expenses, their budget utilization stands at 68.0%, and they have no out-of-pocket costs.

The insights panel also shows that the $1,700 in total reimbursements has a pre-tax equivalent value of approximately $2,210 at a 30% marginal tax rate.

💡 If you're also planning for future healthcare savings, our HSA Contribution Limit Calculator can help you maximize your Health Savings Account contributions.

Optimizing Your HRA Utilization

Health Reimbursement Arrangements (HRAs) are a valuable, tax-advantaged benefit provided by employers to help cover healthcare costs.

To optimize HRA utilization, employees should proactively track their allocated budget, which can range from $1,000 to $5,000 annually for individual plans, and submit claims promptly.

Understanding the list of eligible expenses, typically defined by IRS Publication 502, ensures that only qualifying medical, dental, and vision costs are submitted for reimbursement.

Many HRAs have a "run-out" period after the plan year ends, allowing a few extra months to submit claims for expenses incurred within the plan year.

Failing to submit claims within this period means forfeiting those funds.

Proactive management ensures you fully leverage this employer-funded benefit, reducing your out-of-pocket healthcare burden.

Regulatory and Standards Context for HRAs

Health Reimbursement Arrangements (HRAs) are governed by several key federal regulations, primarily the Internal Revenue Code (IRC) Section 105 and Section 106, which establish their tax-advantaged status.

Under these sections, employer contributions to an HRA are deductible for the employer, and reimbursements to employees for qualified medical expenses are generally tax-free.

HRAs are also subject to the Employee Retirement Income Security Act (ERISA), which sets standards for employee benefit plans, and the Public Health Service Act.

A significant regulatory development was the 21st Century Cures Act, which paved the way for Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) and Individual Coverage HRAs (ICHRAs).

QSEHRAs allow small employers (fewer than 50 full-time employees) to reimburse employees for individual health insurance premiums and other medical expenses, with specific annual limits (e.g., $6,350 for individuals in 2026).

ICHRAs, introduced in 2020, allow employers of any size to offer an HRA to reimburse employees for individual health insurance premiums, provided certain conditions are met, fundamentally changing how employers can offer health benefits while adhering to ACA market reforms.

Frequently Asked Questions

What is a Health Reimbursement Arrangement (HRA)?

A Health Reimbursement Arrangement (HRA) is an employer-funded health benefit plan that reimburses employees for out-of-pocket medical expenses and, in some cases, insurance premiums. Unlike HSAs, HRAs are solely funded by the employer, and employees cannot contribute. The funds in an HRA are not taxable to the employee when reimbursed for qualified medical expenses, making it a valuable tax-advantaged benefit for covering healthcare costs.

What types of expenses are typically eligible for HRA reimbursement?

Eligible expenses for HRA reimbursement typically include a wide range of qualified medical care costs, as defined by IRS Publication 502. This commonly covers deductibles, copayments, coinsurance, prescription drugs, dental care, vision care, and in some cases, monthly health insurance premiums. However, the specific list of eligible expenses can vary by employer and HRA plan design, so it's essential to check your plan's Summary Plan Description (SPD) for exact details.

Can HRA funds roll over from year to year?

Whether HRA funds roll over from year to year depends entirely on the employer's specific plan design. Some HRA plans allow unused funds to roll over, accumulating a larger balance for future medical expenses, which can be a significant long-term benefit for employees. Other plans operate on an annual 'use it or lose it' basis, where any remaining balance at the end of the plan year is forfeited. Always consult your plan administrator to understand your HRA's rollover policy.

How does an HRA differ from an HSA (Health Savings Account)?

HRAs are employer-funded accounts that reimburse employees for medical expenses, with the employer owning the account and setting the rules for use and rollover. HSAs, on the other hand, are employee-owned accounts that can be funded by both employees and employers, are portable between jobs, and typically require enrollment in a high-deductible health plan (HDHP). HSA funds grow tax-free and can be invested, making them a long-term savings vehicle, whereas HRA funds are generally not portable and often do not accrue interest or investment returns.

Is HRA reimbursement taxable income for employees?

No, HRA reimbursements for qualified medical expenses are generally not considered taxable income for employees. This is a significant tax advantage, as it means employees receive tax-free money to cover their healthcare costs. The employer's contributions to an HRA are also tax-deductible for the employer, making HRAs a mutually beneficial arrangement for both parties in managing healthcare expenses within a tax-efficient framework.