HRA Plan Document Template: Required Sections, Adoption, and SPD

An HRA plan document template is the written framework a federal law requires every Health Reimbursement Arrangement to have, and it must identify the sponsoring employer, define who is eligible, set the reimbursement amount and allowable expenses, name a plan administrator, lay out a claims and appeals procedure, and address HIPAA, COBRA, and nondiscrimination rules.¹ Pick a template built for the specific type of HRA you’re offering, fill it in carefully, have an authorized officer sign it, and distribute the Summary Plan Description to participants on time. Fixing a defective plan document mid-year costs far more than building it correctly from the start.

Match the Template to Your HRA Type

Before you open a template, decide which HRA you’re actually setting up. The eligibility rules, contribution limits, and plan document provisions differ enough that a template written for one type will not work for another. Federal rules recognize three:²

A Qualified Small Employer HRA (QSEHRA) is limited to employers with fewer than 50 full-time employees who offer no other group health plan. For 2026, the maximum annual reimbursement is $6,450 for self-only coverage and $13,100 for family coverage, and the benefit must be offered on the same terms to all eligible full-time employees, though amounts can vary by age and family size.³⁴
An Individual Coverage HRA (ICHRA) is open to employers of any size and has no statutory contribution cap. Employees must carry their own individual health insurance to participate, and the employer can divide employees into classes (full-time vs. part-time, salaried vs. hourly, location) with different amounts for each class, so long as terms are uniform within a class.⁵
An Excepted Benefit HRA supplements an existing group health plan rather than standing on its own. For plan years beginning in 2026 the annual maximum is $2,200, and it cannot reimburse individual or group health insurance premiums.⁶

Most template mistakes trace back to this choice. A QSEHRA template capped at the statutory maximum will not accommodate an ICHRA’s flexible contribution structure, and an ICHRA template built around employee classes makes no sense for a QSEHRA, where every eligible full-time employee receives the same terms.

What the Plan Document Has to Contain

Whichever type you choose, the IRS has set the baseline structure since Notice 2002-45: the HRA must be funded solely by the employer (no salary reduction), may reimburse only qualifying medical expenses, and may allow unused amounts to carry forward.⁷ Your template needs to reflect each of those features and fill in the specifics below.

Employer Identification and Plan Year

Start with the legal name of the sponsoring employer, the employer’s tax identification number, and the 12-month plan year. The plan year does not have to track the calendar year, but whatever you choose must match what you use on tax filings. A mismatch between the document and your filings is a tedious audit problem to unwind later.

Eligibility and Participation

Spell out exactly which employees can participate and when. A QSEHRA may exclude employees who haven’t completed 90 days of service, employees under age 25, part-time workers (safe harbor: fewer than 25 hours per week), seasonal workers (fewer than 7 months), certain collectively bargained employees, and nonresident aliens with no U.S.-source income.⁴ Beyond those exclusions, everyone eligible gets the same terms.

ICHRAs allow more flexibility through employee classes, but within each class the terms must be uniform. The template should include fields for class definitions, any waiting period, and the effective date of coverage for new hires.⁵

Vague eligibility language invites disputes. If the template says only “eligible employees,” define the term: waiting period, hours threshold, excluded categories, and effective date.

Reimbursement Limits and Eligible Expenses

State the maximum dollar amount available to each participant per plan year. For a QSEHRA, the amount cannot exceed the IRS ceiling.³ An ICHRA has no statutory cap, so the employer chooses the amount.

Eligible expenses should reference the federal definition of medical care, which covers diagnosis, treatment, prevention of disease, prescription medications, transportation essential to medical care, and qualified long-term care services.⁸ Most templates come preloaded with this language. Verify it has not been narrowed in a way that excludes categories your employees expect, such as dental or vision care.

Plan Administrator and Claims Procedure

Name the plan administrator. This is usually the employer, a designated HR officer, or a third-party administrator, and participants have a legal right to know who decides their claims.

Federal regulations require a structured claims procedure.⁹ If a claim is denied, the participant must be told why and given a chance to appeal. For most HRA reimbursement claims, the administrator has up to 60 days to decide an appeal, with a possible 60-day extension for special circumstances.¹⁰ The template should lay out this timeline and explain what documentation a participant must submit.

Nondiscrimination Rules

An HRA is a self-insured health plan, and self-insured plans cannot favor highly compensated individuals. The tax code requires two annual tests: an eligibility test (enough rank-and-file employees must benefit) and a benefits test (the plan cannot give better benefits to highly compensated participants).¹¹

A “highly compensated individual” means one of the five highest-paid officers, a shareholder who owns more than 10% of company stock, or someone in the highest-paid 25% of all employees.¹¹ If the plan fails either test, those individuals lose the tax exclusion on their reimbursements and the amounts become taxable income to them. The plan stays tax-free for everyone else. Your template should acknowledge the testing requirement and avoid eligibility conditions that will fail it, such as limiting participation to management or salaried staff. Run the tests before each plan year starts; a failed test cannot be corrected retroactively.

HIPAA Privacy Provisions

Because the HRA is a group health plan, the claims process involves protected health information: medical expenses, diagnosis-related documentation, pharmacy receipts. The plan document itself must restrict how the employer uses and discloses that data. In practice, it should address who within the organization can access participant health information, what safeguards protect electronic data, and how breaches are handled. If a third-party administrator or outside vendor processes claims, you need a business associate agreement in place before sharing any participant data. Quality templates include HIPAA provisions; bare-bones templates sometimes skip them, and that gap is worth catching before adoption.

COBRA Continuation Coverage

Most HRAs are subject to COBRA, so the plan must offer participants the chance to continue HRA coverage after a qualifying event such as termination or a reduction in hours. The main exception is the Excepted Benefit HRA, which is generally exempt because of its low annual cap and its role alongside other group coverage.⁶ For HRAs that are subject to COBRA, the continuation obligation typically runs through the end of the plan year in which the qualifying event occurs. The document should spell out how COBRA premiums are calculated for the HRA.

Formally Adopting the Plan

A completed template is not a plan until it is formally adopted. That requires the signature of an authorized company officer, such as a CFO or HR director, who has the corporate authority to bind the organization to the financial commitments described. By signing, the officer certifies the document reflects the company’s actual intent.

Record the adoption through a corporate resolution or board meeting minutes. This creates a paper trail showing company leadership approved the benefit, which matters if the IRS or Department of Labor later asks for proof that the plan was a deliberate business decision rather than something an individual set up unilaterally.

Once adopted, keep the plan document and all supporting records for at least six years after the date a related report was filed or would have been due.¹² That six-year floor covers filings, receipts, worksheets, and the resolution authorizing the plan. In practice, hold the plan document, amendments, and participant benefit calculations until all benefits have been paid and any audit window has closed, which often extends well beyond six years.

Giving Participants the Summary Plan Description

After adopting the plan, give every participant a Summary Plan Description (SPD), a plain-language version of the full document explaining how the benefit works and what rights participants have.¹³ The SPD must be clear enough for the average participant to understand. ERISA requires it.

Deadlines are firm. New participants must receive the SPD within 90 days of becoming covered. For a brand-new plan, you have 120 days from the plan’s effective date to distribute it.¹⁴ A court can impose penalties of up to $100 per day for each participant who did not receive their copy on time.¹⁵

For ICHRA and QSEHRA plans, the employer also must provide a written notice to employees at least 90 days before the start of each plan year, separate from the SPD.⁵ This notice gives employees what they need to decide whether to participate and how to handle Marketplace coverage.

You can deliver the SPD electronically if employees regularly use a computer as an integral part of their job.¹⁶ For employees who don’t work on computers, such as warehouse staff, drivers, and retail workers, the electronic safe harbor does not apply. They need a physical copy by hand delivery or first-class mail.

When you amend the plan, participants need to know. A Summary of Material Modifications must be distributed no later than 210 days after the close of the plan year in which the change was adopted, and distributing an updated SPD satisfies the requirement.¹⁷ If a change reduces benefits mid-year, the window tightens to 60 days from the date of adoption.

Ongoing Obligations the Template Won’t Remind You About

PCORI Fee

Employers sponsoring an HRA owe an annual fee to the Patient-Centered Outcomes Research Institute. For plan years ending on or after October 1, 2025, and before October 1, 2026, the fee is $3.84 per covered life.¹⁸ The fee is reported on IRS Form 720 and is due by July 31 of the year following the plan year’s end. The HRA template rarely mentions it, but it applies to every HRA regardless of size.

Form 5500

Whether Form 5500 is required depends on funding and participant count. An unfunded welfare benefit plan covering fewer than 100 participants at the start of the plan year is generally exempt.¹⁹ Most standalone HRAs are unfunded because the employer pays claims out of general assets, so smaller employers usually avoid the filing. If your HRA is funded through a trust, Form 5500 is required regardless of participant count.

Common Template Mistakes

The most frequent error is using a template designed for the wrong HRA type. Before customizing anything, confirm the template matches your business size, whether you offer other group coverage, and the type of HRA you’ve chosen.

The second is vague eligibility language. “Eligible employees” without a definition invites disputes. Specify waiting periods, hours thresholds, and which categories are excluded.

The third is completing the template and filing it away without distributing the SPD or the required annual notice. The plan document is your internal legal instrument; the SPD and annual notice are what participants actually need to use the benefit. Skipping distribution creates compliance exposure and leaves employees unaware the benefit exists.

1
U.S. Government Publishing Office. 29 U.S.C. 1102 – Named Fiduciaries
2
HealthCare.gov. Deciding Between Group Coverage and an HRA
3
Internal Revenue Service. Revenue Procedure 2025-32
4
HealthCare.gov. Health Reimbursement Arrangements for Small Employers
5
HealthCare.gov. Individual Coverage Health Reimbursement Arrangements
6
Internal Revenue Service. Revenue Procedure 2025-19
7
Internal Revenue Service. Notice 2002-45
8
Office of the Law Revision Counsel. 26 U.S.C. 213 – Medical, Dental, Etc., Expenses
9
U.S. Department of Labor. Benefit Claims Procedure Regulation FAQs
10
eCFR. 29 CFR 2560.503-1 – Claims Procedure
11
Office of the Law Revision Counsel. 26 U.S.C. 105 – Amounts Received Under Accident and Health Plans
12
Office of the Law Revision Counsel. 29 U.S.C. 1027 – Retention of Records
13
U.S. Government Publishing Office. 29 U.S.C. 1022 – Summary Plan Description
14
Office of the Law Revision Counsel. 29 U.S.C. 1024 – Filing With Secretary and Furnishing Information to Participants and Beneficiaries
15
Office of the Law Revision Counsel. 29 U.S.C. 1132 – Civil Enforcement
16
U.S. Department of Labor. Technical Release No. 2011-03
17
eCFR. 29 CFR 2520.104b-3 – Summary of Material Modifications
18
Internal Revenue Service. Patient Centered Outcomes Research Trust Fund Fee Questions and Answers
19
U.S. Department of Labor. Reporting and Disclosure Guide for Employee Benefit Plans