HSA and HRA

[Rliwma]

I have HSA from previous employer and HRA from current. Can I contribute to HSA from my previous employer? How does IRS track if I have HRA and HSA?

[Cynthiad66]

The IRS does not track the HRA because it is fully funded by the employer and not included in income by you..  Your HSA is reported to the IRS on form 1099-SA.  The HSA account belongs to you, not to your former employer.  As long as the HSA custodian permits you to deposit contributions into the account (I can't imagine that they would not allow you to do so), yes, you can use the existing HSA account to receive your HSA contributions.

An HRA must receive contributions from the employer only. Employees may not contribute. Contributions aren't includible in income. Reimbursements from an HRA that are used to pay qualified medical expenses aren't taxed.

Use this link for more information:  Health Savings Retirement Account and Other Tax Favored Health Plans

You can have both HRA and a HSA at the same time.  Healthcare spending accounts, such as Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs), help individuals and families pay for medical expenses. The answer is yes, you can have an HRA and HSA at the same time, under specific circumstances.

How do HRA and HSA work together?

The HRA reimburses all deductible expenses above $1,500. You're eligible to fund an HSA since your HRA is now an HSA-qualified medical plan as well. You can use HSA funds to reimburse the first $1,500 of deductible expenses tax-free before the HRA begins to reimburse your claims.

[Mike9241]

note to contribute to an HSA you must be covered by a high deductible health insurance plan and no other health insurance plan that is not high deductible. certain insurance doe not disqualify you like dental coverage, cancer coverage, 

[Boombaby99]

I have been looking for an answer to this question and have received different answers, even on this website. Thank you so much for clarifying what I believe the IRS says in their publications. My family is enrolled in a HDHP that has a $9k deductible with an integrated HRA that is post deductible. It doesn't reimburse any claims before $4k. After $4k in claims have been paid, the HRA will reimburse the next $2kin claims. It appears HSA participation is still allowable under these circumstances because both the HRA and the health insurance plan meet the IRS minimum annual deductible to be considered HDHPs. 

[BillM223]

Yes, you can contribute to your HSA because your HRA is post-deductible. See IRS Publication 969.

Note that you can use amounts out of the HSA to pay for items that are not covered by the HRA or the HDHP policy.

Note that, generally, you can't use both HRA and HSA dollars to pay for the same expense.

[Boombaby99]

That's what I thought. We used both last year on medical expenses. We did not use HSA funds to pay for any HRA reimbursed claims. My husband used his HSA to pay for the $4k in claims that weren't covered by the HRA. I am keeping receipts, bills, and EOBs along with a timeline for tax record keeping purposes. Do I have to turn all of this documentation into his employer as well? His employer is the one who submits all of the EOBs to the third party administrator (PrimePay) for reimbursement. It automatically was reimbursed to my husband. The crazy thing is, some of the employees don't even know that his employer signed them up for an HRA....

His boss and their insurance broker told me that my husband can use the HSA funds to pay for medical expenses and then get them reimbursed by the HRA. Then we would report the HRA reimbursements on our tax return and pay taxes on the reimbursements. After reading the IRS 969 Publication and your reply, I believe this to be an incorrect way to handle this health plan arrangement. You are not allowed to use HSA funds to pay for any medical bills that have been reimbursed. Since we didn't use the HSA funds to pay for the HRA covered claims, we should not owe taxes on those disbursements. Am I correct in this understanding?

[RobertB4444]

The documents that you'll need to submit for the HRA are only those that you wish to have reimbursed.  

As long as you have receipts documenting the medical expenses that you withdrew money from the HSA for then those withdrawals are not taxable.  As @BillM223  said you can't take credit for the same expense from your HSA that has been reimbursed by the HRA already.  Otherwise, you're fine.

@Boombaby99 

[Boombaby99]

Well, there isn't any choice given in the matter. His employer submits EOBs automatically without even asking employees. My husband literally submits nothing. 

[BillM223]

Normally, employees submit medical claims to the employer, for reimbursement under the HRA. It's a bit odd that the employer is getting the medical claim first.

However, it works out the same either way. Just don't double-dip by paying the same claim under the HRA and the HSA.

[Boombaby99]

Okay, that's what I figured. It is odd and I don't understand how it doesn't violate HIPAA law. I also have been reimbursed for certain claims before I ever even got a bill because of this automatic process. I'm not sure how the employer has access to my family's EOBs. They also set up accounts for all of the employees without their knowledge. Doesn't seem right...

[BillM223]

That is a question of law, which we do not answer here. Perhaps you want to consult a lawyer, or if you are in a union, the union officers.