Health Reimbursement Account (company funded HRA)

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big bang
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Health Reimbursement Account (company funded HRA)

Post by big bang »

Hi all,
Question for someone that has been using this benefit for a few years.
My wife has company funded HRA account which we take advantage of.
Is the amount used, reported as an additional benefit or income to the IRS? Are they supposed to issue a 1099 or any other form so we need to report it when we do our taxes?
Thank you!
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
Silk McCue
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Re: Health Reimbursement Account (company funded HRA)

Post by Silk McCue »

If the funds from the HRA are spent on qualified medical expenses according to the plan rules they are not taxable.

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RickBoglehead
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Re: Health Reimbursement Account (company funded HRA)

Post by RickBoglehead »

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Last edited by RickBoglehead on Tue Nov 12, 2019 4:36 pm, edited 1 time in total.
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big bang
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Re: Health Reimbursement Account (company funded HRA)

Post by big bang »

RickBoglehead wrote: Tue Nov 12, 2019 2:48 pm The amount used IS supposed to be reported to you on a form. You will get a form 1099-SA for each type of distribution you make during the year. You will get a 5498-SA for the contributions you make during the year. You complete form 8889 each year. https://www.irs.gov/pub/irs-pdf/f8889.pdf

If you use the funds for acceptable purposes, there is no tax owed.
Its look like the information above is for Health Savings Accounts (HSA). The IRS reporting is the same?
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
Silk McCue
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Re: Health Reimbursement Account (company funded HRA)

Post by Silk McCue »

I Googled “HRA tax reporting” and found this on Page 17 - no tax reporting.

https://www.irs.gov/pub/irs-pdf/p969.pdf

Google is your friend.

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big bang
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Re: Health Reimbursement Account (company funded HRA)

Post by big bang »

Silk McCue wrote: Tue Nov 12, 2019 2:45 pm If the funds from the HRA are spent on qualified medical expenses according to the plan rules they are not taxable.

Cheers
So, at the end of the year, does the company issues some kind of a form for tax reporting?
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
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big bang
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Re: Health Reimbursement Account (company funded HRA)

Post by big bang »

Silk McCue wrote: Tue Nov 12, 2019 4:16 pm I Googled “HRA tax reporting” and found this on Page 17 - no tax reporting.

https://www.irs.gov/pub/irs-pdf/p969.pdf

Google is your friend.

Cheers
Got it.
Thank you!

IRS Publication 969
Note. Unlike HSAs or Archer MSAs, which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for HRAs on your income tax return.
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
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RickBoglehead
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Re: Health Reimbursement Account (company funded HRA)

Post by RickBoglehead »

big bang wrote: Tue Nov 12, 2019 4:09 pm
RickBoglehead wrote: Tue Nov 12, 2019 2:48 pm The amount used IS supposed to be reported to you on a form. You will get a form 1099-SA for each type of distribution you make during the year. You will get a 5498-SA for the contributions you make during the year. You complete form 8889 each year. https://www.irs.gov/pub/irs-pdf/f8889.pdf

If you use the funds for acceptable purposes, there is no tax owed.
Its look like the information above is for Health Savings Accounts (HSA). The IRS reporting is the same?
Sorry, misread. :oops:
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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GerryL
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Re: Health Reimbursement Account (company funded HRA)

Post by GerryL »

I have an HRA from my former employer that can be used to reimburse medical and healthcare premiums. Only premiums. I understand that it is being phased out for people hired since I retired.

There are no taxes on the dollars that are reimbursed and there was no tax on the total that was put into my name when I retired and there are no taxes on the growth.

It's one of the few retirement benefits the company offers, in addition to accelerated RSU vesting. You can leave it to grow if you don't need it right at retirement. (E.g., it cannot be used to pay insurance premiums if you get health insurance from a new employer.) I have pretty much left mine alone for the first 5 years of retirement and am just now starting to use it, primarily to pay for long-term care insurance. In a forum of company retirees there are frequently debates about whether to use it as quickly as possible or save it for later.
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Re: Health Reimbursement Account (company funded HRA)

Post by Ron »

I/wife receive annual funding of an HRA from my former employer as a retirement benefit since I turned 65, six years ago.

The funds can be used for anything medical related (health care premiums, co-pays, dental, OTC drugs, etc.)

If any funds are left over at the end of the year, they are rolled over and added to the next year's contribution.

The benefit is not taxable, nor are any tax/income forms generated.

- Ron
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