Can a HRA Work with an HSA? Understanding How They Can Complement Each Other

Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) are two popular healthcare savings options that provide tax advantages for medical expenses. But can they work together?

HRAs and HSAs can complement each other, but there are certain rules and limitations to be aware of. Here is a breakdown of how HRAs and HSAs can work together:

• Employers can offer both an HRA and an HSA to their employees, but there are restrictions on how they can be used together.
• An employer may decide to offer an HRA alongside an HSA to provide additional coverage for medical expenses.
• Contributions to an HRA are made solely by the employer, while contributions to an HSA can be made by both the employer and the employee.
• Employees can use funds from their HSA to pay for qualified medical expenses not covered by the HRA.

It is important to review the specific guidelines of each plan to ensure they are being utilized correctly and in compliance with IRS regulations. By understanding how HRAs and HSAs can work together, individuals can maximize their healthcare savings and benefits.

Health Reimbursement Arrangements (HRAs) paired with Health Savings Accounts (HSAs) can create a powerful combination for managing healthcare costs, providing a dual layer of financial support for your medical expenses.