Health Reimbursement Account - HRA

You work for a company with an HRA. You get an account in your name, funded by your employer, which reimburses you for certain medical expenses not otherwise covered by your health insurance.

Every year, your employer puts $750 in your HRA. If you incur a medical expense (it has to be something that qualifies for the HRA), you can dip into this fund to help pay for it. However, exceed $750 and you're out of luck. Anything more than that comes out of your pocket.

You need special glasses. You have googly eyes, where your pupils bounce around in a comically random fashion, unless you have your custom eyewear. The glasses aren't covered by your health plan, but they do fall under the items allowed by the HRA. They cost $500.

You buy the glasses with your own money, then submit a receipt, along with the appropriate paperwork, to your health insurance provider. Your next paycheck has an additional $500 reimbursement for the glasses (the reimbursement comes tax-free).

Now there's $250 left in your account, which has to last you the rest of the year. Come January (or whenever your plan resets), the total goes back to $750 (usually, if you don't spend the money, it doesn't roll over).

These accounts are similar to Health Savings Accounts (HSA). An HSA is funded by the employees themselves, while an HRA receives funding from the employer, a perk they provide to defray some of the employee's medical costs.