Can You Have an HRA Account and a Previous HSA Account with No Funds Going Into It?

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HRA and HSA definitions and basics

Many people wonder if they can have both a Health Reimbursement Account (HRA) and a previous Health Savings Account (HSA) with no funds going into it. The answer to this question revolves around the rules and regulations governing these two types of healthcare savings accounts.

An HRA is an employer-funded account that reimburses employees for qualified medical expenses, while an HSA is an individual-owned account that allows individuals to save and pay for qualified medical expenses on a tax-free basis.

Rules for combining HRA with previous HSA

Here is some important information to consider:

• If you have an existing HSA with no funds going into it, you can still participate in an HRA offered by your employer.
• Having an HRA and a previous HSA is allowed, as long as you are not actively contributing funds to the HSA.
• If you have a previous HSA with a balance but are not making contributions to it, you can still use the remaining funds for eligible medical expenses.
• It is essential to keep track of the funding sources and ensure you are not making ineligible contributions that could result in tax penalties.

Conclusion on having both accounts

Overall, it is possible to have both an HRA account and a previous HSA account with no funds going into it, as long as you abide by the rules and guidelines set forth by the IRS.

It's a common question whether you can maintain both a Health Reimbursement Account (HRA) and a previous Health Savings Account (HSA) that has no active contributions. The short answer is yes! You can manage both accounts concurrently.