Can I Have a HSA and HRA? Explained in Simple Terms

If you're wondering whether you can have both a Health Savings Account (HSA) and a Health Reimbursement Arrangement (HRA), the answer is yes! Let's break down how these two healthcare options can work together to benefit you.

An HSA and an HRA are both tools that can help you save and pay for medical expenses, but they have different rules and features. Here's a brief overview:

• HSA:
• It is a tax-advantaged savings account available to individuals enrolled in a High Deductible Health Plan (HDHP).
• Contributions are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are tax-free.
• HRA:
• An employer-funded benefit that reimburses employees for out-of-pocket medical expenses.
• Employers own the HRA, and unused funds may not be portable if you change jobs.

Now, let's address how you can have both:

• You can have both an HSA and an HRA at the same time, but there are some restrictions:
• If you have an HRA, it must be a Limited Purpose HRA or a Post-Deductible HRA to be HSA-compatible.
• A Limited Purpose HRA only covers certain expenses like dental and vision care or preventive care until the deductible is met.

Having both an HSA and an HRA can provide you with additional flexibility and savings opportunities when it comes to managing your healthcare expenses. Remember to check with your employer and healthcare provider to understand how these accounts can work together for your benefit!

If you're considering whether to balance a Health Savings Account (HSA) alongside a Health Reimbursement Arrangement (HRA), you’re in luck! The great news is they can complement each other beautifully, offering you even more ways to save for your healthcare needs.