An HRA? Red Flag for HSA Eligibility. A Post-Deductible HRA? An Employee's Friend.

This column is an excerpt (Question 67) from a book to be published later this year to help guide account owners, employers, benefits managers, and administrators understand Health Savings Account compliance issues. The format consists of a common question, an explanation in easy-to-understand English (often with an appropriate example), and a citation from government documents to support the answer. The book is designed to inform. It is not a legal document, and the contents should not be construed as legal advice.

Question: I’m enrolling in my employer’s HSA-qualified plan with a $6,000 family deductible. The company offers a Post-Deductible Health Reimbursement Arrangement that reimburses all my deductible expenses above $3,500. Does this HRA affect my Health Savings Account contribution limit?

Answer: No. A Post-Deductible Health Reimbursement Arrangement is a second form of coverage under the tax code. In this case, you’re covered on two HSA-qualified plans: your medical plan with a $6,000 deductible and the HRA with a $3,500 deductible. Both plans’ deductibles are higher than the statutory minimum annual deductible (3,300 in 2025) and don’t cover any non-preventive care below the deductible. Therefore, you are HSA-eligible and can contribute up to the statutory maximum annual contribution (if you’re eligible all 12 months). Neither the total value of your Post-Deductible HRA nor your actual reimbursement offsets any portion of your maximum Health Savings Account contribution.

Your Post-Deductible HRA must be integrated with your medical plan so that it doesn’t begin to reimburse any qualified expenses before you meet at least the statutory minimum annual deductible for an HSA-qualified plan ($1,650 for self-only coverage and $3,300 for family coverage 2025.

Your employer is responsible for designing the HRA to comply with the tax code. Your company should hire a competent third-party administrator to assist it in designing the plan, drafting compliant plan documents, and administering the plan correctly.

You must understand the rules so that you can double-check the plan design to make sure that you remain HSA-eligible.

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IRS Rev. Rul. 2004-45:

Post-Deductible Health FSA or HRA. A post-deductible health FSA or HRA that does not pay or reimburse any medical expense incurred before the minimum annual deductible under section 223(c)(2)(A)(i) is satisfied. The individual is an eligible individual for the purpose of making contributions to the HSA. The deductible for the HRA or health FSA (“other coverage”) need not be the same as the deductible for the HDHP, but in no event may the HDHP or other coverage provide benefits before the minimum annual deductible under section 223(c)(2)(A)(i) is satisfied. Where the HDHP and the other coverage do not have identical deductibles, contributions to the HSA are limited to the lower of the deductibles. In addition, although the deductibles of the HDHP and the other coverage may be satisfied independently by separate expenses, no benefits may be paid before the minimum annual deductible under section 223(c)(2)(A)(i) has been satisfied.

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IRS Notice 2008-59:

?Q-8. Is an individual with family HDHP coverage who is also covered by a post-deductible HRA or post-deductible health FSA an eligible individual under § 223(c)(1) if the post-deductible HRA or post-deductible health FSA reimburses § 213(d) medical expenses of a spouse or dependent incurred before the minimum family HDHP deductible under § 223(c)(2)(A)(i)(II) has been satisfied?

A-8. No. If an individual with family HDHP coverage is covered by a post-deductible HRA or post-deductible health FSA that reimburses the § 213(d) medical expenses of any covered individual before the minimum family HDHP deductible under § 223(c)(2)(A)(i)(II) has been satisfied, that individual is not an eligible individual under § 223(c)(1).

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Q-15. What medical expenses may be taken into account in determining when the HDHP deductible is satisfied for purposes of a post-deductible HRA or post-deductible health FSA?

A-15. Only medical expenses described in § 213(d) and covered by the HDHP may be taken into account in determining whether the HDHP deductible, or the minimum deductible in § 223(c)(2)(A)(i), has been satisfied. For example, if the HDHP does not cover chiropractic care, expenses incurred for chiropractic care do not count toward satisfying the HDHP deductible or the minimum deductible in § 223(c)(2)(A)(i). For self-only HDHP coverage, only the covered medical expenses of the covered individual count toward satisfying the HDHP deductible or the minimum deductible in § 223(c)(2)(A)(i)(I).

Example. In 2008, an individual, spouse and child have family HDHP coverage with a $2,500 deductible. The HDHP does not provide benefits for vision or dental care. They are also covered by a combination limited purpose/post-deductible HRA that pays or reimburses § 213(d) medical expenses incurred by each family member after the family incurs $2,500 in covered medical expenses, and pays or reimburses vision and dental expenses before and after the HDHP deductible is satisfied. On February 15, 2008, the family incurs $2,500 in vision and dental expenses that are reimbursed by the HRA. On March 17, 2008, the family then incurs $400 in expenses covered by the HDHP (but for the deductible). The family must incur an additional $2,100 in covered medical expenses before the HDHP deductible is satisfied.

The HRA may not reimburse the family for the $400 of expenses because the family had not incurred $2,500 in covered expenses when the $400 was incurred.

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The content of this column is informational only. It is not intended, nor should the reader construe the content, as legal advice. Please consult your personal legal, tax, or financial counsel for information about how this information applies to you or your entity.

HSA Question of the Week is published every week, alternating every other Wednesday with HSA Wednesday Wisdom and every other Monday with HSA Monday Mythbuster.