What Happens to an HRA If You Go to a HSA?

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What happens to HRA balance

Health savings accounts (HSAs) and health reimbursement arrangements (HRAs) are both valuable tools for managing healthcare expenses, but what happens if you transition from an HRA to an HSA?

When you switch from an HRA to an HSA, your HRA balance does not disappear. Here is what typically happens:

• The HRA funds remain available for eligible healthcare expenses until you exhaust the balance.
• You can no longer contribute to the HRA once you have an HSA.
• You can continue to use the HRA funds for qualified medical expenses, dental care, vision care, and other eligible expenses.
• However, you cannot use the HRA funds to pay for health insurance premiums or to contribute to your HSA.
• If you leave your employer, you may lose access to the HRA funds depending on the plan rules.

Why the switch has cost implications

It's essential to understand the implications of switching from an HRA to an HSA and how it may affect your healthcare expenses.

When making the shift from a health reimbursement arrangement (HRA) to a health savings account (HSA), it's important to know that your existing HRA funds remain intact, offering you continued access to finances for eligible healthcare expenses.