Can an HSA and HRA be paired together?

Employers offering a high-deductible health plan (HDHP) sometimes offer participants a health reimbursement arrangement (HRA) to buy down the deductible. The HRA design will determine whether HDHP participants can also maintain eligibility to contribute to a health savings account (HSA).

An HRA offered alongside, or integrated with, an HDHP will generally be structured in one of three ways:

• General-purpose HRA: Available to reimburse qualifying medical expenses up to a certain annual dollar limit at any time during the plan year.
• Post-deductible HRA: Reimbursements not available until after a participant incurs claims up to a set dollar amount, and thereafter available to reimburse qualifying medical expenses up to a certain annual dollar limit.
• Limited-purpose HRA: Reimbursements immediately available, but only for limited-scope dental and vision expenses up to a certain annual dollar limit.

A general-purpose HRA offering will make all participants ineligible to contribute to an HSA. Being eligible for HRA reimbursement prior to incurring claims of at least $1,600 for single HDHP coverage, or $3,200 for family HDHP coverage (in 2024) is disqualifying coverage for purposes of HSA-eligibility. This is true regardless of whether the participants actually receive any reimbursement from the HRA.

However, a post-deductible HRA or limited-purpose HRA will not interfere with HSA eligibility. A post-deductible HRA paired with an HDHP allows for HSA-eligibility so long as the HRA doesn’t provide coverage before the individual incurs claims of at least $1,600 for single or $3,200 for family coverage (in 2024). In addition, a limited-purpose HRA (available solely to reimburse dental or vision expenses) paired with an HDHP also allows participants to be eligible to make and receive HSA contributions. 

Finally, a combination of limited-purpose and post-deductible HRAs paired with an HDHP will also allow for HSA-eligibility. For example, the HRA could provide limited-purpose reimbursement (solely for dental or vision expenses) until the minimum HDHP deductible is met ($1,600 for single; $3,200 for family in 2024) and then become available to reimburse all qualifying medical expenses once the deductible is met. This is confirmed in IRS Notice 2004-45.

Content for the WEX compliance Q&A is provided by Benefit Comply, LLC. Benefit Comply provides employee benefits compliance support and services to brokers, employee benefits consultants, and TPAs nationwide. For more information go to www.benefitcomply.com.

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

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