HRA - Mistaken Contributions

[luissaha]

I have a situation where mistaken contributions were made to a retiree-only HRA.  I'm familiar with IRS guidance on recovery of mistaken HSA contributions but cannot find anything on mistaken HRA contributions.  The custodian of the HRA is claiming the HSA rules apply but I'm wondering if there is any other applicable guidance for mistaken HRA contributions.

[Brian Gilmore]

The HSA rules have little in common with the HRA rules because the HRA is an ERISA employer-sponsored group health plan.  

That said, HRAs are almost almost always unfunded notional accounts that are bookkeeping entries paid from the employer's general assets.  In that overwhelming majority situation, there really isn't such thing as a mistaken HRA contribution.

I suppose you could have a funded trust account HRA, which would be different.  In that case there are probably plan/trust terms governing how to address overcontributions.

It's possible you're referring to the much more common issue of mistaken HRA distributions.  In that case, I recommend following the health FSA (not HSA) framework: https://www.newfront.com/blog/correcting-improper-health-fsa-payments

[luissaha]

Brian, thank you for the response.  Yes, the contributions have been deposited into a trust account.  I'll check the terms of the HRA plan/trust document and see what they provide on this.

[Susan L]

Luissha, any chance this is a governmental employer and a government affiliated trust? If so, I have a few follow-up questions, but little advice. These look like the wild west to me.

[luissaha]

Haha, yes, it is the wild west for sure.  I'll complicate it even more.  Yes, this is a governmental employer but the trust holding the contributions was established by public sector unions.  Thus, there is an argument the trust is governed by ERISA, but it's not clear.  I don's t see any legal issues if the public agency were to take contribution "credits" for the overpaid amounts to offset future funding.  Thoughts?