2004 Claims exceed balance

[nancy]

If an employee submits a claim to the HRA in 2004 that exceeds his HRA balance, can the HRA pay the balance and pay the remainder of the claim in 2005 when additional benefits accrue?

[Ron Snyder]

No official guidance has been provided on this issue; however, I believe that the answer would depend on what additional amounts will be in the account in 2005 that are not there now, and under what conditions they are available. In general the answer would be "no" because reimbursements would need to be for the same year in which the expense is incurred. An exception would include a plan that credits additional amounts, for example, on 12-31-04 (rather than as of 01-01-05).

The HRA carryover feature only applies to amounts actually credited and not used, not the other way around.