What Happens to an HRA Balance if You Go to an HSA?

When you transition from an HRA (Health Reimbursement Arrangement) to an HSA (Health Savings Account), you may wonder what happens to your HRA balance. An HRA is an employer-funded account that helps cover eligible healthcare expenses, while an HSA allows you to save and invest money for medical costs. Here's what you need to know:

If you switch from an HRA to an HSA:

• The balance in your HRA typically does not transfer over to your HSA.
• You may need to use up your HRA funds before contributing to an HSA.
• Check with your employer or benefits administrator for specific details about your HRA and HSA transition.

In summary, your HRA balance does not automatically transfer to your HSA when you make the switch. Be sure to plan accordingly and utilize your HRA funds before moving to an HSA.

Are you considering a transition from an HRA (Health Reimbursement Arrangement) to an HSA (Health Savings Account)? It's essential to understand how this change might impact your HRA balance. An HRA is designed to reimburse you for out-of-pocket healthcare expenses, funded entirely by your employer. In contrast, an HSA allows you to save and grow your own money—from your pre-tax income—for future medical needs.

During this transition:

• Your HRA balance typically does not transfer to your HSA.
• Make sure to exhaust your HRA funds before opening or contributing to an HSA.
• Consult with your employer or benefits administrator for detailed guidance specific to your situation.

In conclusion, understanding the nuances of your HRA and HSA can help you make informed financial decisions about your healthcare spending.