Which of the following is NOT a component of Health Reimbursement Arrangements (HRAs)?

Health Reimbursement Arrangements (HRAs) are employer-funded plans that provide tax-free reimbursements to employees for qualified medical expenses. The essential characteristic of HRAs is that they are financed solely by the employer; employees do not make contributions to fund their accounts.

Tax-free reimbursement for qualified medical expenses is a core feature of HRAs, allowing employees to get reimbursed for eligible medical costs without incurring taxes. Fixed dollar amounts per year can also apply, as employers may define specific limits on how much they will reimburse. Lastly, the employer funding aspect is foundational to an HRA, as these arrangements are designed to enhance employee health benefits through employer contributions rather than employee input.

Since HRAs are structured around employer funding and do not involve employee contributions, it is accurate that funding from employee contributions does not form part of HRAs. This distinction underscores the employer's role in providing financial support for employee medical expenses, which aligns with the purpose of HRAs.