What is a Health Reimbursement Account?

A health reimbursement account is an employer-funded health plan that reimburses employees for qualified medical expenses, according to HealthCare.gov. This is a tax-free reimbursement capped at a fixed dollar amount.

The money in a health reimbursement account rolls over and is available to use in subsequent years, explains HealthCare.gov. With this type of account, the employer owns and funds the account, but the employee may use the money.

The health plan administers the health reimbursement account, claims the U.S. Office of Personnel Management. The credits in this account do not earn interest, and the employee forfeits them if he changes health plans or leaves the job.