Do you lose HRA money if you quit?

Whether HRA (Health Reimbursement Arrangement) funds expire depends entirely on the specific rules set by your employer and whether you remain with the company.

Year-End Rollovers

• No automatic federal rule: Unlike FSAs (Flexible Spending Accounts), the IRS does not mandate a strict "use-it-or-lose-it" rule for HRAs, but it also does not require unused funds to roll over.
• Employer discretion: Your employer decides if unused funds carry over into the next plan year, get capped at a certain amount, or expire at the end of the year. Check your company’s Plan Document to know your specific setup.

Changing or Leaving Jobs

• Employment separation: Because HRA funds are owned entirely by the employer, they do not travel with you. If you quit, get laid off, or retire, your access to the HRA typically ends immediately, and any remaining balance is forfeited back to the company.
• Run-out periods: Plans often give you a short grace period (such as 90 days) after leaving or after the plan year ends to submit claims for medical costs you incurred before your termination date.

Yes, your employer-provided benefits typically end either on your last day of work or on the final day of the month in which you quit.

Health Insurance and Medical Benefits

• Termination date: Coverage usually stops on your last day of employment or at midnight on the final day of that specific month, depending on your company's policy.
• COBRA option: You can temporarily keep your current group plan for up to 18 months through COBRA, but you must pay the entire monthly cost plus a 2% fee without any employer help.
• Marketplace option: Quitting qualifies you for a special 60-day enrollment window to buy an individual plan through HealthCare.gov.

Retirement and Other Accounts

• 401(k) / 403(b): Your own contributions and vested balance remain yours. You can leave the money in the old plan, roll it over to a new employer's plan, or move it to an IRA.
• Flexible Spending Accounts (FSAs): Health FSA spending rights usually end on your last day of work, meaning you cannot use funds for expenses incurred after that date unless you use COBRA.

You can spend your Health Reimbursement Arrangement (HRA) funds on qualified medical, dental, and vision expenses as defined by IRS Section 213(d), though your specific employer's plan rules may limit what is covered.

Common Eligible Expenses

• Medical Care: Doctor office visits, copays, coinsurance, deductibles, hospital services, and X-rays.
• Prescriptions & OTC Items: Prescription drugs, plus over-the-counter medicines (like pain relievers and allergy meds) and menstrual care products without a prescription.
• Dental Care: Cleanings, fillings, root canals, X-rays, and braces.
• Vision Care: Eye exams, prescription eyeglasses, sunglasses, and LASIK surgery.
• Medical Equipment: Blood pressure monitors, crutches, glucose monitors, and hearing aids.
• Insurance Premiums: Certain types of HRAs (like an Individual Coverage HRA or QSEHRA) may also allow you to pay for individual health insurance premiums.

You can review a full searchable index of items using the HealthEquity HRA Eligible Expenses Index or read more detailed categorization through Take Command Health's Guide to HRA Eligible Expenses.

What is Usually Not Covered

• Cosmetic procedures or teeth whitening
• General health and wellness items (like standard gym memberships or general toiletries) without a specific doctor's prescription or Letter of Medical Necessity

When you get fired, your Health Reimbursement Arrangement (HRA) coverage typically ends immediately, and any unused money stays with your employer.

What Happens to Your Funds

• Forfeiture: Because HRAs are owned and funded entirely by employers, you cannot take the money with you. Unused balances usually revert back to the company.
• Run-out Period: Most plans give you a short window of time (a "run-out period") after termination to submit reimbursement claims for eligible medical expenses you incurred before you were fired.
• No Cash-Out: Employers are legally not allowed to give you the remaining HRA balance in cash.

Exceptions and Options

• COBRA Continuation: HRAs are generally subject to COBRA. This means you may have the right to elect to continue your HRA coverage, but you will have to pay the full COBRA premium yourself to keep incurring and submitting new expenses up to your remaining balance.
• Plan Document Rules: A small number of company plans might be designed to let you "spend down" the remaining balance after leaving, or rules may vary, so it is important to check your specific Summary Plan Description.

A Health Reimbursement Arrangement (HRA) is an employer-funded plan that reimburses employees tax-free for qualified medical expenses and, in some cases, insurance premiums.

Pros of an HRA

• Tax advantages: Employer contributions and reimbursements are tax-free for employees and tax-deductible for employers.
• Cost control: Employers set a fixed maximum reimbursement limit, making it easier to budget and control healthcare spending.
• Flexibility for employees: Employees can choose how to use their allowance for eligible medical, dental, or vision costs, or individual insurance plans (depending on the HRA type).
• No pre-funding required: Employers do not need to put cash into an account ahead of time; they only pay when an actual expense is submitted and reimbursed.

Cons of an HRA

• Not portable: The employer owns the HRA funds, so if an employee leaves the company or gets fired, the remaining money stays with the business.
• Out-of-pocket requirement: Employees must pay for medical services first and then wait for approval and reimbursement from their employer.
• Employer discretion on rollovers: Unused funds do not automatically roll over; it depends entirely on whether the employer allows annual rollovers.
• Administrative rules: Compliance and setup can be complex, with strict rules about what expenses qualify and how allowances are distributed.