A health reimbursement arrangement (HRA) is a flexible health benefit that allows employers to offer a tax-free allowance to their employees to spend on qualifying medical expenses and individual insurance premiums.

A common question we get a lot from Business owners is: “Can I participate in my organization’s HRA as the owner?”

While offering an HRA should primarily be about assisting employees with their healthcare needs, some business owners may be eligible to participate, too.

The answer depends on your tax filing status and what type of organization you’re running. An owner must be considered an employee of their organization in order to be eligible to participate in their HRA. However, not all business entities consider their owners employees.

This article reviews HRA owner participation for the following owner types and entities:

• C-corporation owners
• S-corporation owners
• Partners
• Sole proprietors

Are you a visual learner? Check out our infographics to see if you’re eligible to participate in your organization’s QSEHRA, ICHRA, or GCHRA.