Can I have both an HSA AND HRA at the same time? Conflicting eligibility rules

You've hit on a really tricky area of tax and benefits planning! The key to answering your question lies in understanding what the IRS calls a "limited purpose HRA." In general, you're right that having both an HSA and HRA at the same time usually doesn't work because traditional HRAs cover expenses before you hit your deductible, which disqualifies an HDHP from being HSA-eligible. However, there are special types of HRAs that ARE compatible with HSAs. For your specific situation, if your employer's HRA is truly ONLY for hospital services (not other medical services), it might qualify as what's called a "limited purpose HRA." Limited purpose HRAs can coexist with HSAs because they don't undermine the high-deductible nature of your health plan for non-excluded services. To be absolutely certain, your employer should check how their HRA plan documents are written. The plan needs to explicitly restrict reimbursements to just hospital services (and potentially vision/dental, which are also allowed exceptions). If it's properly structured this way in writing, then yes, employees should be able to contribute to HSAs.

I went through this exact same headache last year with my company's benefits! I was so confused until I found this amazing service called taxr.ai (https://taxr.ai) that actually analyzed my benefits documents and cleared everything up for me. I uploaded my company's benefits handbook and HRA plan document, and it specifically pointed out the language that classified our hospital-only HRA as a "limited purpose HRA" which made it HSA-compatible. The tool highlighted the exact sections I needed to reference when talking with my HR department, who honestly seemed just as confused as I was about the rules. The coolest thing was that it also showed me exactly how much I could contribute to my HSA based on my specific plan details and family status. Definitely saved me from making a costly mistake!

Just wanted to update everyone - I took the advice about taxr.ai from the comment above and it was actually super helpful! I uploaded our benefits documents and it confirmed that our hospital-only HRA is considered a "limited purpose HRA" which DOES allow HSA contributions. The service even pointed out a section in our benefits guide I completely missed that specifically states the HRA was designed to be HSA-compatible. It also showed me that for 2025, my husband and I can contribute the full family amount ($8,300) even though he has his own insurance, as long as my HDHP covers both of us and neither of us has disqualifying coverage. This was seriously way more helpful than the 3 different answers I got from our HR department. I've already set up my HSA contributions through payroll!

If you're still having trouble getting a clear answer from your HR department, you might want to try Claimyr (https://claimyr.com). I used them to get through to an actual IRS agent about a similar HSA/HRA question when my employer wasn't sure about the rules. They basically got me to the front of the IRS phone line in about 15 minutes instead of waiting for hours or getting disconnected. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that hospital-only HRAs can be compatible with HSAs as long as they're properly structured as limited purpose HRAs. They also emailed me the specific IRS guidance document to share with my HR department, which finally resolved the confusion.

Well I'll be damned, I decided to try that Claimyr service after seeing it mentioned here, and it actually worked! After weeks of trying to get through to the IRS about my HSA/HRA question (and getting nowhere), I was connected to an agent in about 20 minutes. The IRS agent confirmed that hospital-only HRAs can be HSA-compatible if they're properly structured as "limited purpose HRAs" under IRS Notice 2002-45 and Revenue Ruling 2004-45. She explained that your employer needs to have explicitly designed the HRA to only cover hospital expenses. She also mentioned that I should look for specific language in my plan documents that says the HRA is intended to be HSA-compatible. If that language isn't there, there could be problems with HSA eligibility. Honestly shocked this service actually got me through to the IRS. Definitely worth it for the peace of mind knowing my HSA contributions are legit.

Just to add another perspective from someone who deals with this at work - I'm a benefits coordinator and we specifically set up a hospital-only HRA for our employees because so many people wanted to keep contributing to HSAs. The key is that the HRA plan documents MUST explicitly state that it only covers hospital services and is designed to be compatible with HSAs. It can't just be a verbal understanding or a company policy - it has to be formally written into the plan documents. Also, make sure the HRA doesn't accidentally cover any other services that would disqualify HSA eligibility. The safest HRAs to pair with HSAs are either: 1) Post-deductible HRAs (only kick in after you meet your full deductible) 2) Limited purpose HRAs (only cover dental/vision or in your case, hospital services

Has anyone considered just using an FSA instead of dealing with all this HSA/HRA complexity? My company offers both options and I just went with the FSA because the rules seemed simpler, even though I know I lose the funds at year end if I don't use them.

This is such a helpful discussion! I'm in a similar situation where my employer just introduced a hospital-only HRA alongside our HDHP, and I've been nervous about contributing to my HSA without being 100% certain about the rules. Based on what everyone's shared here, it sounds like the key is getting confirmation that our HRA is properly structured as a "limited purpose HRA" in the official plan documents. I'm definitely going to request a copy of the actual HRA plan documents from HR and look for that specific language about HSA compatibility. The point about needing explicit written language in the plan documents (not just verbal assurances) is particularly important - I almost made the mistake of just trusting what our benefits coordinator told us verbally during the enrollment meeting. Thanks especially to those who shared the specific IRS guidance documents to reference. Having that official backing will make conversations with HR much more productive!

This thread has been incredibly informative! As someone who works in employee benefits consulting, I wanted to add a few important points that might help clarify things further. First, it's worth noting that even with a properly structured limited purpose HRA, you still need to ensure your underlying health plan meets all the HDHP requirements for HSA eligibility. The minimum deductible for 2025 is $1,600 for individual coverage and $3,200 for family coverage, and the maximum out-of-pocket limits are $8,050/$16,100 respectively. Second, regarding the hospital services definition - be aware that some plans get tricky with how they define this. For example, if your HRA covers "hospital facility charges" but excludes physician services performed at the hospital, that's typically fine. However, if the HRA covers ANY medical expenses outside of hospitals (even something seemingly minor like urgent care visits), it could disqualify HSA eligibility. Finally, I'd recommend documenting everything in writing once you get clarity from your employer. If HR confirms the HRA is HSA-compatible, ask them to put that confirmation in an email you can keep for your records. This can be crucial if questions arise later during an IRS audit or when working with tax preparers. The IRS doesn't mess around with HSA eligibility rules, so it's definitely worth taking the time to get this right!