Can my employer change my HSA account to a HRA account?

Question

I have a HSA through which my employer gives me $1000 a year. When I turned 65, I decided to bypass Medicare so I could keep my HSA, employer contribution, and my monthly contribution.

Now at 67 I am being told that they are going to change the HSA to a HRA. Can that be done without consulting with me? Since I have bypassed Medicare I have had a hard time getting them to deposit the $1000 into my HSA account.

My concern is that I will not be able to fund the HRA and don't think they can do this. Any help with this question would be greatly appreciated!!

Answer 1

It would not convert your existing HSA to an HRA. Your HSA is yours and stays yours.

However, if the company decided to offer only HRAs in the future (which is there decision, and probably not related to you personally), you can either join and open an HRA too, or not join, and be on your own, without health insurance.
Either way, the company won't put money in your HSA.

In the former case, you will have an HSA without the option to contribute further (but you can still use the money in it to pay for medical bills). Your HRA has very different rules; mainly you need to use the money every year, or it is lost.

In the latter case, you could privately get health insurance (through ACA or otherwise), and pay yourself in your HSA. Of course, you are on your own for the premiums and the HSA contributions.

Finally, you have the option to change employer, to someone that still offers a plan with an HSA.

Sidenote: It might not be a great idea to postpone Medicare sign-up. You will potentially pay dearly for that later; make sure you understand all consequences.

Answer 2

This question is fairly complex and depends on your other situations. First does your employer have at least 20 other employees and is your plan considered creditable coverage for medicare purposes? If it doesn't you were never eligible to delay medicare at all and may face substantial penalties for the rest of your life.

If this does not apply it seems your employer is confused and thinks you switched over to medicare when you did not while you actually remained on their HDHP. You also want to make sure you are still actually on their HDHP and were not kicked off automatically due to an oversight, as this could cause additional problems. It is also possible you accidentally accepted the free part A coverage available to you at 65 which would make you ineligible to use an HSA, or at least your employer thinks you did.

If none of this is the case explain to the employer that you have delayed Medicare and instead chose to remain on their plan and that you are eligible to continue using a HSA, and assuming they still offer this in general (as opposed to discontinuing HSA contributions all together) they are obliged to continuing offering it to you.