What is a Health Reimbursement Arrangement (HRA)?

by | Sep 8, 2021

An HRA is a reimbursement account set up and funded by your employer to cover eligible healthcare expenses as defined in the HRA Summary Plan Document. Unlike a healthcare FSA where the IRS defines the eligible services, your employer defines the services eligible for reimbursement from an HRA. Typically, an employer will reimburse deductible, coinsurance and copay expenses from your HRA but not services such as medical, dental or over the counter drugs. An HRA can also cover all or a portion of your prescription drug expenses. Check your employer’s HRA Summary Plan Document to see what types of services are covered under the HRA being offered by your employer.

What is the maximum contribution I can make to my HSA?

by | Sep 8, 2021

The IRS sets the maximum contribution limits for the HSA each year. The maximum annual contribution limit for 2018 is $3,450 if you are enrolled in Individual coverage and $6,850 if you are enrolled in Family coverage. Once you are over the age of 55, you can contribute an additional $1,000 above the standard annual maximum. (Note: if both spouses are over the age of 55, each spouse would need have their own HSA to contribute the $1,000 catch-up)

If your HDHP was effective on January 1st, the total amount you can contribute to your account is the maximum contribution amount set by the IRS. If your HDHP is effective after the first day of the month, you may make or receive a full year’s contribution to your HSA for partial year coverage as long as you maintain your HDHP enrollment for 12 months. If enrollment is less than 12 months, the tax benefit is lost and a 10% penalty is imposed.

Who is eligible to open and contribute to an HSA?

by | Sep 8, 2021

If you are enrolled in qualified High Deductible Health Plan (HDHP) – either through your employer or you have purchase and individual policy – you are most likely eligible to open and contribute to an HSA. Additional eligibility criteria include:

  • You must have a valid Social Security Number (SSN) and a primary residence in the U.S.
  • You cannot be covered by any other type of health plan, including Medicare Part A or Medicare Part B.
  • You cannot be covered by TriCare.
  • You cannot have accessed your VA medical benefits in the past 90 days (to contribute to an HSA).
  • You cannot be claimed as a dependent on another person’s tax return (unless it’s your spouse).
  • You must be covered by the qualified HDHP on the first day of the month.