what is the difference between an hra and and hsa
HRA vs HSA â Whatâs the difference? The key difference between the two accounts is that an HRA is employer-owned whereas an HSA is employee-owned. This means an HRA is left behind when an employee no longer works for that employer, and the funds are no longer accessible.
Whatâs the difference? One of the most important differences between the two is that the employer owns the HRA and the employee owns the HSA. This means that the employee takes the HSA along when he or she changes jobs. If an employee with an HRA changes or loses his or her job, any remaining amount in an HRA defaults to the employer. Another significant difference involves how the two types of accounts are funded. The money in an HRA is provided solely by the employer. HRAs are usually unfunded notional accounts, with no cash value. An HSA is a tax-advantaged account that can be used to pay for IRS-defined health care expenses, including long-term care and COBRA premiums. Anyone can contribute to an HSA, including the employer, the employee or a family member.
HRA â Health Reimbursement Arrangement. 1  Paired with a high-deductible health plan. 2  Employerâs contribute non-taxable funds into this account Employees do not contribute into an HRA. 3  Employer designs the plan The Employer has say on what employees can use the HRA for and when they can use it.