Short answer: Yes. Most HRAs are considered COBRA-eligible group health plans, meaning employees who experience a qualifying event must be offered the option to continue the HRA through COBRA, with limited exceptions.
In general, a Health Reimbursement Arrangement (HRA) is treated as a group health plan for COBRA purposes. As a result, when a qualifying event such as termination of employment or a reduction in hours causes a loss of coverage, qualified beneficiaries must be offered COBRA continuation for the HRA.
This rule typically applies to traditional HRAs that are offered alongside a group health plan, as well as Individual Coverage HRAs (ICHRAs) that reimburse employees for individual health insurance premiums and eligible medical expenses. In these cases, the HRA itself is the benefit being continued under COBRA.
Because HRAs do not have a fixed monthly premium, employers must determine the cost of COBRA continuation using a reasonable method, such as the amount made available under the HRA for the plan year or the expected value of reimbursements for similarly situated employees. The maximum COBRA charge is generally 102% of the cost of coverage, which includes a 2% administrative fee.
COBRA continuation may be limited based on how the HRA is designed. For example, some plans allow access only to the remaining HRA balance available at the time of the COBRA election, rather than providing new credits after employment ends.
One important exception is Qualified Small Employer HRAs (QSEHRAs). QSEHRAs are not subject to COBRA because they are not considered group health plans under federal law.
Sources
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U.S. Department of Labor, FAQs on COBRA Continuation Health Coverage:
https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra -
IRS, Questions and Answers on Health Reimbursement Arrangements (HRAs) (COBRA applicability):
https://www.irs.gov/affordable-care-act/employers/health-reimbursement-arrangements-hra -
CMS, FAQs About HRAs and the ACA (ICHRAs as group health plans):
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/health-reimbursement-arrangements-and-the-aca
Content history
Originally published: March 27, 2025
Last reviewed: January 24, 2026