HRA Savings Examples

HRA Savings Examples

Everyone Benefits from an HRA

That’s right … we can all keep more money in our pockets by having an HRA! Find the profile below that best fits you and then see how an HRA can help boost your finances.

For all of our examples below, assume*:

  • Your employer provides $1,000 for an individual’s HRA and $2,000 for an employee with dependents.
  • The HRA plan includes a rollover feature that allows you to carry over unused funds to the following plan year.
  • Your employer’s plan allows you to use your HRA funds to pay for a wide variety of eligible health care expenses.

*Important: Our scenarios are merely examples. Some of the pricing and other details may not be the same as your HRA and health care plans. Keep in mind that your employer determines how much goes into an account each year, if the plan includes a rollover feature, and if so, how much can be rolled over to the next plan year, as well as the expenses that will be reimbursed. For specific details related to your HRA, refer to your employer’s Summary Plan Description (SPD).


Single, Young, and Healthy

Other than the occasional cold, your annual checkup, and an eye exam, you really don’t spend much on your health care. However, your contacts, solutions, and other supplies can really add up throughout the year. Here’s how an HRA will keep more money in your pocket.

Plan Year 1: You visit your doctor for an annual exam, and since it’s covered at 100 percent, there’s no money deducted from your account. Throughout the year, you use your HRA funds to pay for an eye exam, a year’s worth of contacts, solution, and eye drops — totaling $450. Deduct this amount from your $1,000 beginning balance that your employer provides, and you’re left with $550 that you can carry over to the next plan year.** You haven’t spent a single dime all year!

Plan Year 2: Add $550 to the $1,000 provided by your employer each year. You now have $1,550 in your HRA to use toward eligible health care expenses. That’s more than enough money for your vision expenses and a cushion of savings if you get sick.


Single Professional

You’re now in control of your career, your finances, and your health. You go to the doctor each year for an annual exam and an occasional office visit for allergies. Ready to see how an HRA will save you money throughout the year?

Plan Year 1: You start the year off with $1,000 in your HRA. Since annual exams are covered at 100 percent, there’s no cost when you visit your doctor for a yearly checkup. When your allergies flare up, you go to the doctor twice during the year and get a prescription filled four times — totaling $300. So subtract $300 from the $1,000 beginning balance, and you have $700 left in your account to roll over to the next plan year.**

Plan Year 2: Your employer adds $1,000 to your HRA when the plan year begins. Now your account balance equals $1,700, and funds can be used to pay for your eligible health care expenses throughout the year. See how an HRA gives you even greater power and control over your health care finances?


Single Parent

At times you’re stretched to your limits and so is your bank account. You never know when you’ll be heading to your child’s doctor because of an ear infection or an unexpected injury. Your medical expenses are starting to take a toll on your budget. Find out why an HRA is the plan for you.

Plan Year 1: Your employer gives you $2,000 to start off your HRA. Preventive checkups for both you and your child are covered at 100 percent — no cost out of your pocket or HRA for annual exams. However, your child comes down with an ear infection in March and then the flu in November. Unfortunately, you get the flu as well. So you use $400 of your HRA funds to pay for three visits to the doctor and three prescriptions. Plus, you have your eyes checked and purchase new eyeglasses, using $300 of your funds to pay for the frames and $100 toward the eye exam. At the end of the year, you’ve used $800 of your HRA funds. That leaves a remainder of $1,200 that rolls over to the next plan year.**

Plan Year 2: Add $2,000 to your $1,200 balance from the previous year, and you begin the second plan year with $3,200 in your HRA. That’s plenty of money to cover your family’s health care incidentals throughout the year. Doesn’t that give you some peace of mind knowing you can keep more money in your bank account?


Married and Planning for a Baby

You and your husband want to have a baby in the next year or two. While you only have routine medical expenses right now, you know having a baby will be costly. An HRA can help ease the financial burden of an expensive birth.

Plan Year 1: You and your husband participate in an HRA, and you begin the plan year with $2,000 in your account. Good news! Your annual OB/GYN exam is covered in full since it’s a preventive checkup, and your husband’s annual exam is, too. The two of you stay healthy throughout the plan year and only spend $15 of your HRA funds to purchase an over-the-counter pregnancy test that you plan to use soon. That means you’ll roll over $1,985 into your HRA the following plan year.**

Plan Year 2: Since you’re carrying over $1,985, add the $2,000 your employer provides at the beginning of each plan year, and your second plan year HRA totals $3,985. That’s a substantial amount that you can apply toward the birth of your future baby.


Married with Kids

Injuries, and shots, and strep throat, oh my! You never know what will happen next with your active family. A sprained ankle one day and throat infection the next. Aren’t you lucky that your employer provides an HRA with funds totaling $2,000 that you can use to pay for health care expenses throughout the plan year?

Plan Year 1: The year starts off with the entire family getting a respiratory infection, so you use $400 of your HRA funds to pay for doctor visits and antibiotics. There’s no need to stress out about spending your funds. Since preventive well-child checkups, an annual OB⁄GYN exam for your wife, and your annual exam are all covered at 100 percent, your HRA dollars stretch even further. By the end of December when your plan year ends, you've only spent $1,100 of your account balance on various health care expenses. Good news! You can carry over $900 to the following plan year.**

Plan Year 2: In January, your employer adds $2,000 to your HRA, which boosts your balance to $2,900. Saving money on your health care expenses means you can put more money into your kids’ college savings accounts. An HRA really pays off in the long run!


Planning for Retirement

You’ve dreamed of retiring and can’t wait to enjoy your golden years. When you participate in an HRA, that dream can be closer than you may have imagined.

Plan Year 1: Your employer provides $2,000 that you and your spouse can use throughout the plan year to pay for your eligible health care incidentals. All of your annual checkups and preventive procedures are covered at 100 percent, so you and your husband take advantage of all the preventive procedures. With an HRA, staying healthy pays off. However, when your diabetes becomes uncontrollable, there’s no need to worry about the cost of additional tests and new medicine needed to keep your blood sugar in check — your HRA funds cover these expenses. When the plan year ends, you’ve only spent $900 of your HRA funds and not a penny out of your pocket.

Plan Year 2: Isn’t it a great feeling to carry over $1,100** from the previous plan year? And when your employer adds in $2,000, you start the year off with $3,100 in your account. You’re elated that you can use the money you budgeted for your out-of-pocket medical expenses into your retirement savings — getting closer than ever to your retirement dream.


Learn more about health reimbursement arrangements by reading our HRA Participant Guidelines page.

**Important: Not all HRA plans include a rollover feature that allows unused funds to carry over to the following plan year. Since each employer determines the setup for their HRA plan, please refer to your employer’s Summary Plan Description for details related to your HRA.