HSA FAQs

HRA FAQs

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a type of personal savings account you can set up to pay certain health care costs. An HSA allows you to put money away and withdraw it tax free, as long as you use it for qualified medical expenses.

Can anyone enroll in an HSA?

No.  Only employees enrolled in a High Deductible Health Plan as defined by the IRS can enroll in an HSA.  If an employee is on a traditional (or low-deductible plan), they would be restricted from HSA enrollment.

What are HSA qualified medical expenses?

HSA funds can be used to cover medical, dental, and vision expenses not covered by insurance, such as deductibles, copayments, coinsurance, etc. IRS Publication 969 provides additional details about qualified medical expenses.

When are HSA funds deposited?

September and January.  South Sanpete School District will post $1000 to the HSA by the end of September of each year and remaining balance in January of each year.  If an employee waives medical coverage, they will receive a total of $3000 in the HRA for the year.  If an employee enrolls in the District medical coverage, they will receive a total of $2000 in the HRA for the year.

Do unused HSA funds roll to the next year?

Yes.  Unused HSA funds automatically roll from year to year.

Can I contribute pre-tax dollars to my HSA?

Yes.  Employees can contribute money directly from their paycheck by contacting the District Office.  Employees can also contribute to the account outside of payroll by contacting the account administrator.

What are the limits to HSA contribution?

The IRS updates HSA contribution limits annually.  Contribution limits are based on plan status (single or family health plan) and age.  For example, the 2023 contribution limit is $3,850 for those on a single health plan and $7,750 for those on a family health plan.  Employees age 55 or older can make an additional $1,000 catch-up contribution annually.

If I leave employment (resign or retire), can I use the funds in the HSA until they are gone?

Yes.  HSA accounts are employee-owned so employees can use funds in the account until they are gone.  Once the employee leaves employment, they are responsible for any account fees.

What are the HSA contribution limits for age 65 and older?

You can contribute to your HSA as long as you are an eligible individual and have not enrolled in Medicare Part A, B, or D. Once you enroll in Medicare you (or your employer) may no longer contribute to your HSA.

What is a Health Reimbursement Arrangement (HRA)?

A health reimbursement arrangement (HRA) is an employer-funded plan that reimburses employees for qualified medical expenses.

What are HRA qualified expenses?

Expenses not covered by health insurance. Typical expenses include insurance copays and deductibles, medical exams, vision expenses, dental care, mental healthcare, chiropractic services, and prescription drugs. Over‐the‐counter drugs that are medically necessary, like allergy medications or aspirin, may also be paid through your plan when accompanied by a doctor’s note stating the medical necessity. Insurance premiums for health insurance provided by the employer, individually owned policy premiums, or long‐term care insurance premiums may be paid from the HRA plan. IRS Publication 502 provides additional details about qualified expenses.

When are HRA funds deposited?

September and January.  South Sanpete School District will post $1000 to the HRA by the end of September of each year and remaining balance in January of each year.  If an employee waives medical coverage, they will receive a total of $3000 in the HRA for the year.  If an employee enrolls in the District medical coverage, they will receive a total of $2000 in the HRA for the year.

Do unused HRA funds roll to the next year?

Yes.  Unused HRA funds automatically roll from year to year as long as an employee remains employed with South Sanpete School District or have retired.

If I retire, can I use the funds in my HRA until they are gone?

Yes.  If an employee retires from South Sanpete School District, they can continue to use HRA funds until they run out.

If I leave employment (resign), can I use the funds in the HRA until they are gone?

No.  An HRA is not portable, meaning if an employee leaves employment (with the exception of retirement), any unused funds will no longer be available to the employee.  The employee may submit reimbursement claims for expenses incurred before the end of coverage within 60 days of coverage end date.

Can I transfer my HRA funds to an HSA?

No.  HRA funds are non-transferrable.

Can I have an HSA instead of an HRA?

Maybe.  If an employee is covered under a high deductible health plan, they can open an HSA.  However, any unused funds in the HRA would no longer be available to the employee.