Which statement about Health Reimbursement Arrangements (HRAs) is true?

• A. NOT portable (employee leaves)
• B. Portable across employers
• C. The employee can contribute funds
• D. Reimburses only for medical expenses

Answer: (A)

Health Reimbursement Arrangements are employer-funded accounts used to reimburse employees for qualified medical expenses. The key point here is that they are not portable across employers: the funds belong to the employer, and when you leave the company, you generally don’t take the balance with you. That non-portability is the defining feature tested by this question.

People can’t contribute to HRAs themselves, which is why the statement about employee contributions is not correct. While HRAs do reimburse medical expenses, the important distinction for this item is the lack of portability.