Under a Health Reimbursement Arrangement (HRA), do funds roll over automatically?

• A. Funds roll over automatically every year.
• B. Funds are owned by the employee.
• C. HRA is funded by the employee.
• D. Funds do not roll over unless the plan allows.

Answer: (D)

In an HRA, the employer funds the account and typically owns the funds. Whether unused money carries over to the next year is not automatic; it depends on the plan's design. If the plan includes a rollover provision (sometimes with a cap on the amount that can carry over), funds can carry forward into the next plan year. If there’s no rollover feature, unused funds don’t carry over and may revert to the employer. So the statement that funds do not roll over automatically unless the plan allows is the correct understanding.