Anyway to extract income from HRA prior to switching jobs?

[NathanDrake]

My insurance is an HRA plan where each year a certain amount is deposited into our accounts which can then be rolled over each year. This pays for health care costs.

The big downside is that this account is not transferable upon leaving the company. As a result, thousands of dollars have accumulated in my account that will disappear should I decide to the leave because I do not have any ongoing health issues and tend to take care of myself through preventative measures.

Frankly, I hate this type of insurance plan. I'd much prefer to have an HSA that I could carry with me than this type of account. I've been paying into it for years and received no direct benefit, yet if and when I do need the money in the future it is gone if I switch companies.

Is there any way to effectively (and legally) tap into this account?

[nobody123]

How have you been "paying into it"?  By definition, HRAs are funded by the employer, so you're not really losing anything when it goes away.

If you know you're leaving the company soon and won't be using your reimbursement, I would see if it allows for reimbursement for things like contact solution, crutches, etc., that have a long shelf life and don't require you to go to a doctor to get a prescription for them.  Buy, get reimbursed, then flip on Craigslist or Ebay, or just return them to the store.  Restock your first aid supplies at home that you will potentially use over their expected shelf life.  I wouldn't consider doing any of that until I knew I was about to leave, since you never know when a major medical event will occur.

In general, I wouldn't think it's worth the hassle, and it is sort of an ethical gray area.  Just be happy that you didn't have any medical expenses to have the opportunity to max out the reimbursements. 

[Nepoxx]

I don't think it's an ethical gray area, I think it's just plain black. Getting crutches with insurance and then reselling them is just plain wrong.

[tennisray]

If you are talking about an HRA, then it doesn't cover things like contact solution, bandaids, etc (if it's like mine).  That is an FSA.

An HRA (which I have) is money allocated to pay the first dollars of any medical needs.  So instead of a copay, you pay for any health care you receive.  So if the doctor's appointment costs 300$, then the HRA will cover it for you and you are not out of pocket anything.  So if you start off with $500 in your account, then you don't pay anything for the first $500.  After that you pay a percentage of heath care costs.

So, if I were you, I'd start making appointments for anything you've been putting off.  Dermatologist, chiropractor, physical therapist, etc.  You'll be surprised at how quickly that money will deplete! 

I wonder if medical marijuana is considered reimbursable in legal states?  If so, you hit the jackpot!

[nobody123]

I don't think it's an ethical gray area, I think it's just plain black. Getting crutches with insurance and then reselling them is just plain wrong.

I agree with you.  Like I said, I would be grateful that I didn't have any serious medical problems that required me to deplete the funds, and move on, especially since the amount in the account didn't come out of my pocket.  However, OP was asking about hypothetically leveraging the account, so I threw out an idea.

[sol]

I'm not sure how this is different from using up all of your annual leave before quitting.  In both cases it's an employer-provided benefit that you will lose if you don't use it.

From the employer's point of view, they expect to be out those costs.  As ugly as it feels, I'm not sure they would care if you claimed that cost by seeing a dermatologist or by purchasing a pallet of contact solution and then reselling it on the grey market.  If you think the secondhand value of those goods has more value than the actual medical care you would receive by scheduling some doctor appointments, then I think there's an economically correct solution to this question.

[nobody123]

I'm not sure how this is different from using up all of your annual leave before quitting.  In both cases it's an employer-provided benefit that you will lose if you don't use it.

From the employer's point of view, they expect to be out those costs.  As ugly as it feels, I'm not sure they would care if you claimed that cost by seeing a dermatologist or by purchasing a pallet of contact solution and then reselling it on the grey market.  If you think the secondhand value of those goods has more value than the actual medical care you would receive by scheduling some doctor appointments, then I think there's an economically correct solution to this question.

I'm sure the employer absolutely cares.  It's a green dollar flowing out of their coffers.  And I'm sure they factor in some sort of non-usage by the healthy to subsidize the folks that need to visit the doctor more often.  However, is there anything they could do to stop you from obtaining goods and services according to the rules of the plan?  Probably not.

If OP legitimately needed crutches for a month and then resold them, nobody would expect him to give the proceeds back to his employer, or have an issue with him pocketing the money.  However, I would feel pretty bad if my actions to "get what's mine" caused the employer to drop or eliminate the reimbursement amount, ultimately harming those who truly need the funds to go to the doctor for legitimate medical concerns.  Economically, I shouldn't care, but as a human being I do.

I think the case of using up your vacation before leaving is ethically different.  You have "earned" it in some fashion.  If it is not paid out upon termination, it would be stupid for you not to use it and the company should fully expect you to do so.  Medical benefits that continue to roll over until you truly need them for a catastrophic event provide an ongoing benefit even if they are not being used (you don't have to put X amount aside in savings to handle those expenditures).  You might discount the value of that benefit (ex: you could have accrued 10K in benefits but the annual out of pocket limit is 5K, and you personally would never have set aside anything other than 5K), but then again, you didn't spend anything to get the benefit, so the thought that you are "owed" something doesn't click with me.

I have company paid term life insurance that terminates upon my separation from the company.  I don't plan on killing myself just so I can capture the benefit, lest I not be able to take advantage of it like some of my unfortunate co-workers have.

[nobody123]

You'll have much better luck with this if you negotiate the entire deal first and only bring this up as an "afterthought".

The odds of success would be pretty low, I would guess.  Barring some unique skill that I could not easily find in another candidate that required me to overlook certain personality flaws, if you had reached the point of interviewing with me to the point of having negotiated a compensation / benefits package for the position being offered, then pulled a "but wait, what about X that I conveniently forgot about until right now", I would probably rescind the offer on the "if you give a mouse a cookie" theory.  For personal amusement, I would probably ask something along the lines of:

"If you value some benefit that your current employer offers enough to ask me to compensate you for it ABOVE AND BEYOND what we've already negotiated (which implies you believe it to be fair for the position offered), why are you trying to leave your current employer?  Heck, that sounds like a great benefit, can you pass my resume along to them?"

OR

"If you truly value said benefit so much that you expect me to compensate you for it, why are you bringing it up now?  Shouldn't you have been asking about this benefit when we were negotiating last week?  I think you lied about being detail-oriented."

OR

"Wow, they really offer that?  We don't have to, since we're such a great place to work.  No wonder you can't wait to get out of there."

[netskyblue]

I think the case of using up your vacation before leaving is ethically different.  You have "earned" it in some fashion.  If it is not paid out upon termination, it would be stupid for you not to use it and the company should fully expect you to do so.

I don't know, at my company, they tell you that vacation days are provided with the understanding that you'll work the remainder of the year.  If you take vacation and quit later, you owe for the days you took!

[I'm a red panda]

In other words, when you are negotiating compensation for your next job, use all the normal gambits first in order to get the best possible package. Then after that is all concluded, you can explain that you were just about to ready to sign the deal, but then you remembered that by leaving your employer now, as opposed to in a few months, you would be forfeiting $3,000 in your health plan. You'd much rather join the new company now than in a few months, so you propose that they throw in another $3,000 as a cash signing bonus to cover the HRA balance you'll be forfeiting.

Why use it as a "but wait".  Just use it as part of your negotiations, so HR doesn't hate you as much.

I said to my current company "Your insurance premium is much higher than what I pay where I am now. I'd like to see the difference reflected in my salary."  It is, plus quite a bit more. It was one of many negotiating points.

I don't know, at my company, they tell you that vacation days are provided with the understanding that you'll work the remainder of the year.  If you take vacation and quit later, you owe for the days you took!

He's probably talking about earned vacation.  In many (most?) companies, you accrue vacation at a rate per paycheck, rather than getting it all upfront.  Probably to prevent the scenario you describe and having to get repaid.


One interesting "gray area"- FSA medical expenses are reimburseable to the full amount from Jan. 1.  So if you elect a large amount, then have high medical costs, then leave the company, you don't have to pay into the system for what you've used. I say gray area, because you could take advantage of this if you were quitting, but when I was laid off I found out that I basically had my company pay for thousands of dollars of medical care a few months prior, since i had already been reimbursed, but it was only April so I hadn't put near the max in.

[NathanDrake]

Good suggestion on using it as a negotiation tool, hadn't thought about it but it's definitely something that should be brought up in terms of overall healthcare cost increases by making the switch.