No. As long as you’re HSA-eligible, you can contribute—even if you don’t have earned income or are currently unemployed.
Tax-Advantaged Accounts
Tax-advantaged accounts help individuals and employers save on healthcare and dependent care costs by reducing taxable income. This category includes FSAs, HSAs, HRAs, and Premium Only Plans (POPs)—each with its own rules, benefits, and use cases. Learn how these tools work, who qualifies, and how to use them effectively to get the most value.
Who can contribute to my HSA?
Anyone can contribute to your HSA—yourself, your employer, or a family member. But all contributions combined must stay within the annual IRS limit for your coverage type.
Can spouses share an HSA, or do we each need our own?
HSAs are individual accounts. You can pay for your spouse’s medical expenses, but each eligible spouse must have their own HSA to contribute separately.
Can I have other coverage and still qualify for an HSA?
Only if it’s HSA-compatible. Coverage that pays for non-preventive care before your deductible—like a spouse’s general FSA—can make you ineligible.
What makes a health plan HSA-eligible?
To qualify, a plan must meet IRS rules for deductibles and out-of-pocket limits—and avoid offering coverage before the deductible is met (except for preventive care).
Who can open a Health Savings Account (HSA)?
To open an HSA, you must have an HSA-qualified health plan, no disqualifying coverage, not be on Medicare, and not be claimed as someone else’s tax dependent.
What is a Health Savings Account (HSA)?
An HSA is a tax-free savings account for medical expenses. It works with high-deductible plans and offers triple tax benefits: tax-free contributions, growth, and qualified withdrawals.
What’s the difference between a cafeteria plan, a Section 125 plan, an FSA, and a POP?
A cafeteria plan (aka Section 125 plan) is the tax-free structure. An FSA is a benefit within it. A POP is a basic version that only pre-taxes insurance premiums.
Can business owners participate in an FSA?
C-corp owners can use FSAs, but sole proprietors, partners, and 2%+ S-corp shareholders can’t. They’re not treated as employees under IRS rules for cafeteria plans.
Can business owners participate in an HRA?
C-corp owners can use HRAs tax-free, but sole proprietors, partners, and 2%+ S-corp shareholders usually can’t. They’re not considered employees under IRS rules.
What’s the difference between an HRA and a MERP?
A MERP is a type of HRA used to reimburse part of a deductible. It’s a cost-sharing strategy that helps employers lower premiums while softening the blow for employees.
What happens to my HRA if I leave my job?
In most cases, you lose access to unused HRA funds when leaving a job. Exceptions include retiree HRAs and continued access through COBRA.
Do employees need to submit receipts or documentation for HRA reimbursements?
Yes. Employees must submit receipts or proof of eligible expenses. Employers or administrators are responsible for reviewing claims to ensure compliance with IRS rules.
Can an employee have both an HRA and an HSA?
Generally, no—but employees can have both if the HRA is limited-purpose or post-deductible. These special designs preserve HSA eligibility while offering reimbursement flexibility.
Can HRAs reimburse insurance premiums?
Some HRAs—like ICHRAs, QSEHRAs, and retiree HRAs—can reimburse health insurance premiums. Traditional HRAs may not allow this unless the plan is specifically designed to do so.
Do HRA funds roll over from year to year?
It depends. Employers can choose to allow full, partial, or no rollover of unused HRA funds. This flexibility is one of the key advantages of HRAs.
Are HRAs a COBRA-eligible benefit?
Yes, most HRAs are subject to COBRA. Employees can continue coverage by paying a monthly premium, typically based on the HRA value plus a 2% admin fee.
Who owns the money in an HRA—the employee or the employer?
The employer owns the HRA. Unused funds usually stay with the employer when an employee leaves, unless the plan allows rollover or retiree access.
What can HRA funds be used for?
HRA funds can be used to reimburse eligible medical expenses, but the employer chooses what’s covered. Some HRAs can also reimburse insurance premiums, depending on plan design.
How do HRAs, FSAs, and HSAs differ from one another?
HRAs are employer-owned and funded, unlike HSAs and FSAs. Each account has different rules for contributions, ownership, and how or when funds become available.
What is a Health Reimbursement Arrangement (HRA)?
An HRA is an employer-funded benefit that reimburses employees for medical expenses. Employers control how much is available, what’s eligible, and whether unused funds can roll over.
Do I need to submit receipts or proof for FSA expenses?
Yes. Most FSA expenses require documentation, but some can be auto-adjudicated at the point of sale. If proof is requested and not provided, your card may be suspended.
Can I use my FSA to pay for over-the-counter items?
Yes. Many over-the-counter items like pain relievers, allergy meds, and first aid supplies are FSA-eligible—no prescription needed, thanks to changes made under the CARES Act.
Can I change my FSA election mid-year if my expenses change?
No, not unless you experience a qualifying life event. A change in expenses alone isn’t enough—you’ll need a status change that your employer’s plan recognizes under IRS rules.
What happens to my FSA if I leave my job?
You generally lose access to unused FSA funds when you leave your job. Some healthcare FSAs may be continued through COBRA, but dependent care FSAs cannot.