Health Reimbursement Arrangement (HRA)
A Health Reimbursement Arrangement (HRA) is an employer-owned and funded account to which Purdue contributes funds that may be used tax-free for eligible medical, prescription, over-the-counter, vision, and dental expenses incurred by the employee and their eligible dependents (e.g., spouse, child under age 26) during their HRA coverage period.
HRA funds do not roll over from year to year — any unused funds remaining in the account following the end of the runout period (90 days following the termination of the account) are forfeited. The HRA coverage period, or the time in which the employee may incur eligible expenses, begins with the opening date of the HRA and ends when the HRA ends (typically 12/31). If the accountholder loses benefits eligibility or leaves Purdue employment midyear, their HRA would terminate with that date and they would have 90 days after to file claims for reimbursement of expenses incurred up until that date. HRAs may be continued through COBRA following a loss of coverage (e.g., separation of employment).
Two ways to enroll in an HRA
- Employees who elect any of the new Consumer-Driven Health Plans (CDHP) and decline the HSA (because they are not eligible to receive HSA contributions) will be offered an HRA.
- Employees who complete the Healthy Boiler Wellness Program requirements who are not participating in a Health Savings Account (HSA) and do not already have an HRA with Purdue will have an HRA opened for them. Purdue medical plan participation is not a requirement.
Spouse tip: If you have a spouse who is participating in (i.e., receiving contributions to) an HSA, your enrollment in an HRA will negatively impact their HSA eligibility. The IRS has rules against spouses being covered by these plans at the same time.
HRA contributions are made available in January for those who enroll in an HRA during open enrollment. For those enrolling in an HRA midyear, these contributions will be prorated based on your remaining number of pays in the year.
Purdue will make a contribution to the HRA based on your medical plan enrollment as follows:
- $200 for employee-only coverage
- $400 for family coverage (employee + one or more)
Learn how you can earn additional HRA funds through our Healthy Boiler program.
Note: Employees may not contribute to an HRA.
You may manage the HRA (e.g., check your balance, reimburse yourself for eligible expenses paid out-of-pocket, pay a bill) online at www.hsabank.com or on the HSA Bank mobile app. Questions about HRAs should be directed to HSA Bank at 844-650-8936.
Accessing your funds
You have multiple ways in which you can access the HRA funds — by swiping your HSA Bank debit card, by filing a claim to request reimbursement for an eligible expense paid out of pocket, and by submitting payment to your provider.
The IRS requires plan administrators to validate that HRA funds are used only for eligible health care expenses; therefore, each of the above options requires substantiation or validation of the eligibility of the expense by means of supporting data or documentation. If HSA Bank requests documentation from you, you will have 45 days to provide it. If documentation is not provided, the amount of your unsubstantiated charge(s) will be reported back to you as taxable income the following year, in keeping with instructions from the IRS.
For more information on substantiation, read Tips for substantiating, or validating, your eligible expenses.
Verifying medical necessity
Expenses must be medically necessary to qualify for reimbursement. Some health care services and products (e.g., massage therapy and weight loss programs) may be for both medical and non-medical reasons; therefore, HSA Bank may request that your doctor confirm that the expense is a recommended treatment and is a direct result of a specific, diagnosed medical condition.
If HSA Bank requests confirmation, your doctor may complete a letter of medical necessity which you can submit to them.
HSA Bank Debit Card
Some purchases made by HSA Bank debit card may be auto-substantiated if the provider or merchant uses an inventory information approval system (IIAS) which identifies eligible expenses (most commonly, pharmacies). When a charge is not auto-substantiated, HSA Bank will reach out for documentation.
Cards are linked to the current year's HRA balance and may only be swiped to pay for eligible expenses for the current plan year. See "HSA Bank Debit Card" on the HSA, HRA and FSA page for information and to learn how your card works when you have multiple HSA Bank accounts.
File a Claim
You may file a claim for an eligible expense paid out of pocket at www.hsabank.com or through the HSA Bank mobile app with yourself as the Payee. Log in, click or tap "File a Claim," select the HRA, then follow the prompts to submit supporting documentation and enter the claim details. Funds will be reimbursed via direct deposit (if you have enrolled in it with HSA Bank) or check.
(FSA/HRA) HSA Bank Reimbursement Account Claim Form (If you have more than one account, funds will be pulled based on account stacking order)
Direct Pay to Provider
You may also have HSA Bank send payment by filing a claim as above and entering your provider as the Payee rather than yourself.
HRA Frequently Asked Questions
The questions and answers below pertain to enrollment into an HRA with a medical plan and Purdue base contributions. For questions specific to the Healthy Boiler Wellness program (opening an HRA, earnings), visit the HSA/FSA/HRA section of the Healthy Boiler FAQ.
Can I have an HRA if I have Medicare, Medicaid, or TRICARE?
Yes – Coverage under these does not impact your ability to have an HRA as the eligibility rules for an HRA are different from those of an HSA.
Do the HRA and its funds roll over year-to-year?
No. This is considered a "use-it-or-lose-it" account just like the Flexible Spending Arrangement (FSA). Unused funds remaining in the account after the runout period (90 days following the end of the plan year or termination date) will be forfeited.
When can I use the funds in the HRA?
The HRA funds may be spent on expenses incurred from the opening date of the account until the end of the plan year (12/31) unless your employment ends before that (in which case, the last day to incur expenses is your last working date). You may file claims for reimbursement up to 90 days following your last day to incur expenses. Any unused funds in the account after that deadline will be forfeited.
What happens to the HRA if I terminate my employment with Purdue?
The last day you are employed is the last day you may incur eligible expenses and you have a 90-day runout period to file claims for reimbursement (your card will not work/pull funds from the HRA after you are terminated). Unused funds remaining in the account after the runout period will be forfeited.
What happens to the incentive HRA if I pass away?
The incentive HRA funds are non-transferable, meaning funds in the account cannot be transferred to a beneficiary. The only way to access funds after an employee passes away, is if the employee spouse or representative has your power of attorney. That person can submit a paper reimbursement request for any eligible expenses incurred before the employee passed away. Your power of attorney representative will have a 90-day runout period to file claims for reimbursement. Unused funds remaining in the account after the runout period will be forfeited.
On what and on whom can I spend the HRA funds?
Generally, the HRA funds can be used for the same expenses as a healthcare FSA - eligible medical care expenses including medical, prescription and over-the-counter medicine, vision, and dental expenses. These expenses can be incurred by you, your spouse, and your children under 26, even if you do not cover them on your medical plan. Click here to view a high-level summary of eligible expenses. For a full list of IRS-qualified medical care expenses, please review IRS Publication 502.
As a rule, you cannot use the funds on anything that isn’t for the diagnosis, cure, mitigation, treatment, or prevention of disease (e.g., cosmetic surgery, alternative medicine, teeth whitening). The following are not eligible for reimbursement from the HRA:
- Amounts paid for health insurance premiums, including COBRA
- Amounts paid for long-term care coverage or expenses
- Amounts for eligible expenses already paid by an insurance plan
What other accounts may I (or my spouse, if applicable) have with an HRA?
You and your spouse may have a health care FSA at the same time as you participate in an HRA so long as you do not request reimbursement from both accounts for the same expense. You both may also have a Dependent Care FSA (DCFSA) as this type of account does not impact FSA, HRA, or HSA eligibility.
The IRS prohibits individuals from receiving contributions to an HSA while the employee (or spouse) also participate in a health care FSA or HRA since they cover the same expenses (e.g., medical, prescription, vision, and dental); therefore, if you enroll in an HRA and your spouse is receiving contributions to an HSA at the same time, your spouse's HSA eligibility will be negatively impacted.
What happens if I swipe my card to pay for an ineligible expense?
HSA Bank will reach out to ask for substantiating documentation. If you can't provide it, you will be asked to pay back the account. If neither of those two things take place, you will have to pay taxes on any amount used for ineligible expenses. Additionally, you may incur a 20 percent tax penalty. Consult a tax advisor for more details.
Accessing the Funds
How can I access the money in the HRA?
HSA Bank will issue you a debit card for the HRA when the account is opened (unless you already have a card from a previous account with them; e.g., a Flexible Spending Account - in which case, that card will be linked to the HRA). The debit card may be used from the time you receive it until the last date you can incur claims (the earliest of 12/31 or your last working day in the year the account is opened) either at the place of service to pay for eligible expenses or the card number may be used when paying for eligible expenses that are billed to you.
You may also request reimbursement with the Reimbursement Request Form or by filing a claim online at www.hsabank.com or through the HSA Bank app – log in, click or tap "File a Claim," select “Medical” for the account and follow the prompts to submit supporting documentation and enter the claim details.
I used my HSA Bank card on an eligible expense and HSA Bank is asking me for documentation to prove it was eligible. Why?
The IRS requires account administrators to ensure that the HRA is only used for eligible healthcare expenses. In many cases, the purchase is automatically substantiated, or proven eligible, by the provider's merchant system. Sometimes, however, additional documentation is needed, such as in cases where the card is used at a hospital or dental office since those locations may also offer non-eligible services such as cosmetic surgery and teeth whitening. Here are tips for substantiating, or validating, your eligible expenses.
What happens if I have an expense higher than the HRA balance?
You may only spend or be reimbursed up to the HRA balance. If you submit a claim for more than that, the remaining amount over the balance will stay in a queue and will be reimbursed to you in the event additional funds are contributed to the HRA (such as if you or your spouse, if applicable, complete the requirements for the Healthy Boiler Wellness Program).
How does my HSA Bank card work if I also have a health care Flexible Spending Account (FSA)?
When you swipe your card, funds will first be pulled from your FSA. Once your FSA balance has been depleted, funds will then be pulled from the HRA.
How do I order a replacement or additional HSA Bank debit card(s)?
To order a HSA Bank debit card, call HSA Bank directly at 1-800-357-6246 or log into the member portal at HSA Bank and select Manage My Debit Card(s). Note: Once you have been ordered a total of two cards (including the first you were sent automatically), there is a $6 fee per card afterwards.