I am looking into implementing health reimbursement accounts for my employees, but I’m wondering about how flexible the guidelines for such a plan are. Can I set my monthly contribution based on the employee’s age? What about by existing health problems or life habits like smoking or, on the other side of the coin, commitment to regular exercise? —F.B., Burlington, VT

Flexibility is the great appeal of HRAs, which allow employers to contribute money to accounts that help employees cover qualified medical expenses. One major perk of HRAs is that they do not allow employees to keep unused contributions when they leave the company the way health savings accounts (HSAs) do. However, they are still subject to Health Insurance Portability and Accountability Act rules. These rules prevent employers from discriminating based on existing medical conditions, claims history, or genetic information. While there is no explicit provision prohibiting age-based contributions, Internal Revenue Code statutes prevent discrimination favoring higher-compensated employees, who are usually also the oldest. HIPAA rules do, however, allow employers to offer better rates to those employees who engage in healthy activities such as joining a gym or quitting smoking. For more information visit the Department of Labor’s web site dol.gov/ebsa/faqs.

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