Employees can participate in an ICHRA and contribute to a Health Savings Account (HSA) at the same time, but only if the ICHRA is designed to be HSA-compatible and the employee is enrolled in a qualifying High Deductible Health Plan (HDHP).
Can employees have both an ICHRA and an HSA?
Yes, but only under specific conditions.
Employees can contribute to an HSA if they:
Are enrolled in a qualified HDHP (High Deductible Health Plan)
Are not covered by disqualifying first-dollar medical coverage
Are not enrolled in a plan that provides non-HSA-compatible benefits
An ICHRA does not automatically prevent HSA eligibility, but the design of the ICHRA matters.
What makes an ICHRA HSA-compatible?
An ICHRA must be structured as premium-only to preserve HSA eligibility.
This means:
The ICHRA reimburses health insurance premiums only
The ICHRA does not reimburse medical expenses before the deductible is met
The employee’s plan remains compatible with HSA contribution rules
If an ICHRA reimburses medical expenses (in addition to premiums), employees in the same class will be ineligible to contribute to an HSA. Leftover HRA allowances cannot be rolled over into an HSA.
What is required for an employee to contribute to an HSA?
To contribute to an HSA, an employee must:
Be enrolled in an HSA-qualified HDHP
Not have other disqualifying coverage (such as non-HDHP secondary insurance)
Not be enrolled in a plan that provides first-dollar coverage outside IRS rules
Be eligible under IRS HSA contribution guidelines for that tax year
Even if an employee receives an ICHRA, they must still independently enroll in an HDHP.
Reimbursement and Documentation Guidelines for ICHRA
Double-Reimbursement Rule: Expenses already paid with HSA or FSA funds cannot be reimbursed again through an ICHRA.
Documentation Requirements: Ensure the expense was incurred while the ICHRA was active and submit valid documentation (e.g., receipts, invoices). Final eligibility is determined during claim processing.