Can You Have a MERP and an HSA?

Check eligibility on the go — browse 7,000+ HSA-eligible products in the free app.

MERP and HSA can both coexist

Health Savings Accounts (HSAs) have become increasingly popular for individuals looking to save money for healthcare expenses while enjoying tax benefits. On the other hand, Medical Expense Reimbursement Plans (MERPs) are employer-sponsored plans that reimburse employees for eligible healthcare expenses.

One common question that arises is whether you can have both a MERP and an HSA. The short answer is yes, you can have both a MERP and an HSA, but there are some restrictions and considerations to keep in mind:

Rules on contributions and double-dipping

• It's important to note that having a MERP may affect your HSA contributions. If the MERP is considered a high-deductible health plan (HDHP) by the IRS, then you may need to coordinate your HSA contributions accordingly.
• When you have both a MERP and an HSA, you cannot use the HSA funds for the same expenses that are reimbursed under the MERP. This is because the IRS prohibits double-dipping or using the same funds for the same expenses.
• Having both accounts can provide additional flexibility in covering healthcare costs, as the MERP can reimburse certain expenses while the HSA can be used for future healthcare needs or saved for retirement.

Overall guidance and account benefits

In essence, while it is possible to have both a MERP and an HSA, individuals should be aware of the rules and limitations to ensure they are maximizing the benefits of both accounts.

Health Savings Accounts (HSAs) are a fantastic way to save for healthcare costs while enjoying significant tax advantages. Meanwhile, Medical Expense Reimbursement Plans (MERPs) offer a convenient way for employers to assist their employees with reimbursable healthcare expenses. If you're wondering if you can have both, the answer is yes! However, be aware that there are a few important details to consider.