What happens if I quit or lose eligibility?
If you are participating in an HRA, and quit or lose eligibility, you will be entitled to COBRA on the same terms as for your group health plan.
If your employer offers a "spend-down" option, you may elect to participate in that rather than in COBRA. You cannot participate in both.
What is a Spend-Down option?
The employer may set up a spend-down option for certain events resulting in a loss of eligibility. If so, the employer will allow you to transfer all or a portion of your accumulated HRA balance into spend-down funds. These funds can be used for eligible expenses for a period of time after your loss of eligibility.
If you elect continuation coverage through COBRA, you will be ineligible to participate in the spend-down option.
Can I cash out and take the HRA funds as additional income?
No. Currently with the HRA regulations, there is not an option for taking the HRA funds as a cash option. HRA funds are only available to reimburse eligible medical expenses incurred by the employee or their dependents.
Can I take my HRA balance with me when I leave for another job?
Not at this time, but further regulations in the future may allow this. The spend-down option can allow you to use the remaining funds or you can continue your HRA through COBRA for a period of time.
What if I retire?
If your HRA is structured in such a way that carry-over funds have accumulated to be used at retirement, you will be able to draw on these funds to pay for eligible expenses after you retire.
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