Health Reimbursement Arrangement
A tax-advantaged solution for attracting and retaining employees
The Visa Health Reimbursement Arrangement (HRA) card is a convenient way for employees to access funds in their employer-funded HRA account to pay for eligible medical expenses1 for themselves, their spouses, and dependents. There is no limit to the amount that employers can contribute to their employees’ HRAs, and contributions are not treated as taxable income—even when employees spend the funds. The card significantly reduces the paperwork associated with drawing funds from HRAs and ensures that employees aren’t out-of-pocket twice, even for a short time, when they pay for covered expenses.
On this page
How it works
The Visa HRA card makes it simple for employees to access employer-provided funds to pay for eligible healthcare expenses, such as co-payments, deductibles, and medications. After an employer establishes an HRA, the employee receives an embossed Visa HRA card at the beginning of the plan year. The contribution level and frequency are determined by the employer.
When employees need to pay for eligible expenses, they present the Visa HRA card to the merchant, doctor, pharmacy, or other qualified medical service provider, and the funds are deducted from the employee’s HRA account. All transactions can be documented on monthly electronic or optional printed account statements.
Card features
- Multi-purse capability. Visa’s flexible platform supports HRA programs offered individually or “stacked” with Flexible Spending Accounts (FSAs) and/or Health Savings Accounts (HSAs), all of which can be accessed with a single, multi-purse Visa card.
- One-card solution. Visa HRA cards may be combined with health insurance identification cards for a “one-card” solution.
- Co-branding capabilities. The front of the Visa HRA card may be co-branded with the name/logo of an affinity/co-branding partner.
Benefits
For Employers
Benefits of the Visa HRA card:
- Increased employee participation. Adding a Visa HRA card as a tool to provide easy access to funds can help increase employee participation.
- Reduced administrative costs. The card streamlines the reimbursement process, reducing the number and cost of issuing reimbursement checks to employees.
General HRA benefits:
- Recruitment and retention assistance. HRAs are a positive addition to employers’ benefit packages and can act as an employee recruitment and retention tool.
- Control over funds. With HRAs, employers can provide incentives for desired behaviors and can retain unused funds.
For Administrators
Benefits of the Visa HRA card:
- Value. Choosing Visa ensures flexibility, enhancements, and greater options.
- Streamlined claims process. Offering a Visa HRA card as part of an employee benefit program improves the claims process and significantly reduces administrative paperwork.
- Reduced costs. The card streamlines the reimbursement process, reducing the number and cost of issuing reimbursement checks to employees.
- Account tracking. The Visa HRA card makes it easy to track HRA expenditures. In addition, Visa’s Auto-Substantiation Solution can also help eliminate “pay and chase” and make using Visa FSA/HRA cards easy and more cost-effective for merchants, FSA/HRA plan participants, and benefit administrators than first-generation health benefit cards.
For Consumers
Benefits of the Visa HRA card:
- Convenient access to HRA funds. Enables employees to access funds directly from their HRA without worrying about having funds on hand to cover the co-payment for an appointment or a prescription.
- Reduced paperwork. Significantly reducing or eliminating paperwork due to fewer potential reimbursement claims makes accessing HRA funds easier. Also, less paperwork helps employees make better use of their accounts.
- Visa consumer protections. Visa’s Zero Liability Policy protects employees from unauthorized purchases if their card is lost or stolen; cards can be replaced with the full amount of unauthorized transactions.2 Transaction-dispute rights also apply.
General HRA benefits:
- Tax advantages. Employer contributions are not treated as taxable income, so employees may use the funds tax-free.
About Health Reimbursement Arrangements
Employers provide and fund HRAs to help employees address the high cost of healthcare coverage and medical care.3 Because HRAs are fully funded by employers, the employer determines how the accounts are structured, including whether:
- The HRA plan is an account or can be associated with any type of health plan; typically, HRAs are paired with a high-deductible health coverage
- HRAs can be offered in conjunction with a health Flexible Spending Account (FSA)
- Employees keep unused HRA balances if they leave the job or change health plans
- As set forth in the HRA plan, employees may carry over all or a portion of unused HRA funds from year to year
Because the IRS restricts the use of HRA funds to eligible healthcare-related expenses, the use of Visa HRA cards is restricted to IIAS (Inventory Information Approval System) participating merchants and/or merchants with certain health related Merchant Category Codes (MCCs). Cards can be used for Internet and mail-order/telephone-order purchases of qualified medical products and services. Visa HRA cards cannot be used to access cash.
Get more information
To learn how you can add Visa Healthcare cards to your benefits program, start with our Partner Directory. For more information on HRAs, please visit www.irs.gov.
2 Visa's Zero Liability policy covers U.S.–issued cards only and does not apply to ATM transactions, PIN transactions not processed by Visa, or certain commercial card transactions. Cardholder must notify issuer promptly of any unauthorized use. Consult issuer for additional details or click here.
3 No employee or outside contributions may be made to HRAs, and self-employed individuals are not permitted to have HRAs.
