Do HRA funds roll over from year to year?

Maybe—depending on the employer’s plan design.

One of the most flexible features of a Health Reimbursement Arrangement (HRA) is that the employer decides whether unused funds can roll over from one year to the next. There’s no IRS requirement to forfeit unused HRA funds at year-end, but employers are not required to allow rollover either.

🔁 Common Rollover Options Employers Might Allow:

• Full rollover: 100% of unused funds carry into the next plan year

• Partial rollover: Only a set dollar amount or percentage carries over

• Time-limited rollover: Funds carry over but must be used within a specific timeframe

• No rollover: Any unused funds are forfeited at the end of the plan year

The employer has complete control over this aspect of the plan and may change the rollover rules from year to year (with proper notice).

🧠 Key Takeaway:

Unlike FSAs, which are subject to strict IRS rules on rollovers and grace periods, HRAs are highly customizable. If you’re an employee, you’ll need to check your specific plan documents or ask HR to know how your HRA handles unused funds.

For agents and employers: This flexibility is a big selling point of HRAs, especially for clients who want to reward low healthcare spenders or create a more strategic benefits package.