Handling a HRA Account in YNAB

The health insurance plan where I work uses something called an HRA, or Health Reimbursement Account.  Essentially, we have a fairly high deductible insurance plan, but each year they place $1000 in a reimbursement account for my family.  The first $1000 of expenses that go against the deductible (which I have to pay out of pocket) result in a reimbursement check being cut within about 30 days of the expense.  If I can go without spending the contents of my HRA in a year, the left over amount carries over to the following year.  No, that’s never happened for my family, yet.  They also have incentives that they will add to your HRA account throughout the year, such as if you go through a smoking cessation program, or a weight-loss program.  In those cases, you may get $50 or $25 added to your HRA.  Depending on how many of these incentives you do, you could have a good bit more than $1000 in your HRA account.

One issue that I’ve had with my HRA account is knowing how much is left in it.  I get a statement with each check that tells me how much is left, but my memory about such things isn’t as good as it could be.  And even when I remember things like that correctly, I have a tendency to second-guess myself.  I really want to know without a doubt.

Anyhow, I had a great idea the other day.  I recently read a YNAB blog post that talked about how to use YNAB for business, specifically Accounts Receivable.  The blog entry suggested adding A/R  as an off-budget account in YNAB.  Any time you send a new invoice out (where you expect a payment from a customer), add an entry in your A/R account for that invoice.  When the invoice is paid, in YNAB transfer the money to your main account.  You could also flag that invoice as paid using the color coding in YNAB.  This lets you always see how much you have in outstanding invoices that are owed to you.  It’s not a complete invoicing system, but I could see how this could be useful for a small business.

I realized that I can just treat the HRA account the same way.  I added the HRA account as an off-budget account to YNAB and at the first of the year, put $1000 in that account.  If I qualify for any of the incentives, I can add them to the HRA account throughout the year.  Whenever reimbursement checks arrive, in YNAB I can just transfer the money from the HRA to my checking (at the time I deposit the check).  Then, I can categorize it as income for the current month and assign it to the medical category (or another category, if I’ve borrowed from elsewhere to cover the original medical expense).  The balance shown in YNAB for my HRA account is how much I have left that will be reimbursed to me.

Tracking it this way allows me to easily keep up with the HRA money I have remaining, right down to the penny.