Lesson · Facts First
The HRA
An HRA lets the business pay your family’s medical bills - deductible to the company, tax-free to you.
The facts
- 01An HRA is employer-funded only - no employee contributions - and reimburses verified medical expenses up to the plan limit; reimbursements are excludable from employee income (IRC 105(b)).
- 02ICHRA (since 2020) lets an employer reimburse individual market premiums instead of group insurance, with class-based eligibility - DOL/IRS ICHRA rules apply, including the notice requirement.
- 03QSEHRA exists for small employers under 50 FTEs with reimbursement caps indexed yearly - check the current caps before designing.
- 04One-person businesses generally pair better with an HSA + accountable plan; HRAs shine once you have W-2 employees.
Sources
- IRC Sections 105(b), 9815
- IRS/DOL: ICHRA and QSEHRA guidance
Educational content only — not tax, legal, investment, or VA-benefits advice. Figures verified against the cited sources for 2026; confirm your own situation with a qualified professional before acting.
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