Can You Have an HRA and HSA at the Same Time?

A Health Reimbursement Arrangement (HRA) is an employer-funded account for medical expenses, while a Health Savings Account (HSA) is a personal, tax-advantaged account for healthcare costs. Internal Revenue Service (IRS) regulations create specific conditions for using them simultaneously. While it is possible to have both, the ability to contribute to an HSA is contingent on the type of HRA an employer provides.

The Core Conflict Between HRAs and HSAs

The reason a standard HRA and an HSA are often incompatible relates to HSA contribution requirements. To contribute to an HSA, an individual must be enrolled in a High-Deductible Health Plan (HDHP) and have no other health coverage that pays for medical services before the plan’s deductible is met. The IRS defines such other plans as “disqualifying coverage.”

A general-purpose HRA is considered disqualifying coverage because it can reimburse employees for medical expenses before the HDHP deductible is satisfied, invalidating HSA eligibility. The mere eligibility to receive HRA reimbursements is enough to disqualify an individual from contributing to an HSA, regardless of whether they use the funds. This rule upholds the HDHP principle of paying for initial medical costs out-of-pocket, which a general-purpose HRA undermines by providing first-dollar coverage.

HRA Types Compatible with an HSA

Several types of HRAs are structured to work alongside an HSA without violating IRS rules. These accounts avoid providing disqualifying coverage, which preserves an individual’s ability to contribute to their HSA.

Limited-Purpose HRA

A Limited-Purpose HRA is compatible with an HSA because it restricts reimbursements to specific medical expenses, such as vision and dental care. Because it does not cover general medical costs, the IRS does not consider it disqualifying coverage. This allows an employee to use HRA funds for dental and vision procedures while reserving their personal HSA funds for other medical expenses that count toward their HDHP deductible.

Post-Deductible HRA

A Post-Deductible HRA only becomes active after an employee has met the IRS-mandated minimum annual deductible for an HDHP. For 2025, these minimums are $1,650 for self-only coverage and $3,300 for family coverage. Once an employee proves they have met this deductible, the HRA can reimburse qualified medical expenses. The presence of a Post-Deductible HRA does not affect an individual’s annual HSA contribution limit.

Retirement HRA

A Retirement HRA is compatible with an HSA because its funds are only accessible after an employee retires. During their working years, an employee can contribute to an HSA without interference, as the HRA funds cannot be used. This allows an employee to build savings in an HSA for current needs and a separate, employer-funded account for healthcare costs in retirement. Since Medicare enrollment makes an individual ineligible for further HSA contributions, the Retirement HRA provides a tax-free source of funds for post-career medical expenses.

Suspended HRA

A Suspended HRA is a standard HRA that an employee elects to temporarily freeze to become HSA-eligible. Before the plan year begins, the employee must choose to forgo HRA reimbursements for medical expenses during the coverage period. This suspension removes the disqualifying coverage, allowing the employee to contribute to an HSA. During the suspension, the HRA may still be permitted to reimburse for vision, dental, or preventive care. The suspension can be reversed for a future period, at which point the employee would regain HRA access but lose HSA eligibility.

Navigating ICHRAs and QSEHRAs with an HSA

The Individual Coverage HRA (ICHRA) and the Qualified Small Employer HRA (QSEHRA) have unique rules when used with an HSA. Because these accounts can reimburse health insurance premiums, their compatibility with an HSA depends on how the employer structures the HRA and which expenses it covers.

An ICHRA allows employers to provide tax-free reimbursements for health insurance premiums and other medical expenses. For an employee to contribute to an HSA while using an ICHRA, it must be structured as a “premium-only” arrangement. This means the ICHRA can only reimburse premiums for an individual market health plan that is an HSA-qualified HDHP. If the ICHRA also reimburses out-of-pocket medical expenses, it becomes disqualifying coverage, and the employee cannot contribute to an HSA. Employers can allow employees to opt out of the medical expense reimbursement portion annually to preserve HSA eligibility.

A QSEHRA is available to employers with fewer than 50 employees who do not offer a group health plan. If the QSEHRA reimburses medical expenses beyond premiums, the employee is not eligible to contribute to an HSA. A key distinction for the QSEHRA is that the employee’s annual HSA contribution limit must be reduced dollar-for-dollar by the QSEHRA reimbursement amount. For example, if an individual with self-only coverage receives $2,000 from a QSEHRA in 2025, their maximum HSA contribution of $4,300 would be reduced to $2,300. This offset prevents “double-dipping” on tax benefits.