What exactly are HRAs?
HRAs, or Health Reimbursement Arrangements, are plans designed to reimburse employees for qualified out-of-pocket health care expenses with non-taxable dollars. Unlike FSA’s, these plans are funded solely with employer contributions (District money), not your money.  They take the sting out of increased exposure that members will be liable for on their deductibles and co-insurance. HRA money is not treated as income and is not subject to taxation.

Who would be eligible for LACCD HRAs?
Active and retired employees under the age of 65.

Whose money can go into the HRAs?
HRAs are funded with employer money only. Employees are not allowed to fund them. The employer must contribute the same amount for all employees participating in the HRA in order to avoid the plan being discriminatory. Employer contributions into HRAs are not treated as income to the employee. Catch-up contributions are not available. No cash distributions are allowed.

Must the money be used up every year?
No. Unused amounts roll over from one year to the next and can be used by employees upon retirement to pay for out-of-pocket medical expenses, Part B Medicare, long-term care insurance.

What expenses are HRAs used to pay?
HRAs are used for all qualified health care expenses: These are defined in IRC Section 213(d) – medical, dental, vision, deductibles, out-of-pocket, over-the-counter drugs, etc. Additionally, upon retirement HRAs can reimburse qualified long term care premiums and Medicare premiums.

How would someone use the HRA?
Members would submit proof of qualified medical expenses to a Third Party Administrator hired by the LACCD. The Administrator would reimburse them and maintain a ledger of the amount of money each member has accumulated, used, rolled-over, etc.  

Is money in the HRA mine? Do I have an individual account?
No. HRA funds are not portable – they are part of the employer’s general assets. IHRA funds do not accrue interest, and are not available for cash disbursements.