It depends. If the Health Reimbursement Arrangement money is included as taxable income on your Form W-2, then it was part of your pay and taxable income. If it was taxable income, you should be able to take the Premium Tax Credit with your Marketplace health insurance.
Employers have two choices. They can provide you with employer-sponsored group health insurance and offer an HRA to reimburse you tax-free for out-of-pocket costs like co-pays. Or, if they have fewer than 25 employees and are exempt from the ACA employer mandate, they can provide you with taxable money to buy your own insurance, which is essentially treated as a pay raise.
If the HRA funds are not included in the taxable income on your Form W-2, then indeed, this is a problem.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
