The design of efficient, environmentally friendly, and quiet powerplant for rotorcraft architectures constitutes a key enabler for urban air mobility (UAM) application. This work focuses on the development and application of a generic methodology for the design, performance, and environmental impact assessment of a parallel hybrid-electric propulsion system, utilizing simple and advanced recuperated engine cycles. A simulation framework for rotorcraft analysis comprising models for rotor aerodynamics, flight dynamics, and hybrid-electric powerplant performance is deployed for the design exploration and optimization of a hybrid-electric rotorcraft, modeled after the NASA XV-15, adapted for civil applications. Optimally designed powerplants for payload-range capacity, energy efficiency, and environmental impact have been obtained. A comparative evaluation has been performed for the optimum designs. The respective tradeoffs between engine, heat exchanger weight, thermal efficiency, as well as mission fuel burn and environmental impact have been quantified. It has been demonstrated that a recuperated gas turbine-based hybrid-electric architecture may provide improvements of up to 6% in mission range capability without sacrificing useful load. At the same time, analyses performed for a representative 100 km mission suggest reductions in fuel burn and emissions of up to 12.9% and 5.2%, respectively. Analyses are carried at aircraft and mission level using realistic UAM mission scenarios.