Why the Health Reimbursement New Legislation is designed to help Employer pay for Employees Individual Health Insurance.
Distributions from an HRA
Generally, distributions from an HRA must be paid to reimburse you for qualified medical expenses you have incurred. The expense must have been incurred on or after the date you are enrolled in the HRA. Reimbursements under an HRA can be made to the following persons:
1. Current and former employees.
2. Spouses and dependents of those employees.
3. Any person you could have claimed as a dependent on your return except that:
a. The person filed a joint return,
b. The person had gross income of $3,400 or more, or
c. You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2007 return.
4. Spouses and de;endents of deceased employees.
Qualified medical expenses.
Qualifed Medical expenses are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Ental Expenses. However, even though non-prescription medicines (other than insulin) do not qualify for the medical and dental expenses deduction, they do qualify as expenses for HRA purposes. Qualified medical expenses from your HRA include the following:
Amounts paid for health insurance premiums and Amounts paid for long-term care coverage and Amounts that are not covered under another health plan.