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The HRA benefits are reimbursements for expenses to employees. To provide the benefit an individual must be at least a part time employee and have compensation that is at least taxable for social security and medicare purposes. The reimburement is an expense of the business not a reduction of compensation for the employee. It is important to determine the proper reimbursement level based on compensation. As an extreme example, compensation of $100 per month not likely to support a $20,000 reimbursement amount. You should work with one of the company's that administers these type of plans to determine the appropriate compensation and reimbursement level.