HSA vs. HRA. What is the difference?
We can help employers to assist their employees in lowering the cost of expensive medical fees or costs that might be occurred, over an employee’s life-cycle. While both provide medical expenses, covered under Section 213(d), there are major differences between what is covered.
Discover whether HSA or HRA is the best solution for your business and your employees.
- Account Ownership: Individual and employer
- Account Funding: Anyone can make contributions to an individual’s HSA, including employer and/or employee
- Plans Offered with Account: A high deductible health plan (HDHP) that
satisfies minimum annual deductible and maximum annual out-of-pocket
expense requirements - Eligible Reimbursements: Section 213(d) medical expenses (examples: COBRA premiums, QLTC premiums, Health premiums while receiving unemployment benefits)
- Are Non-Medical Expenses Covered:Yes, but taxed as income
and 20% penalty. No penalty applied if distributed after death, disability, or age 65.
- Account Ownership: Employer
- Account Funding: Employer
- Plans Offered with Account: An employer must offer a health plan and the HRA must be considered integrated with group health plan coverage.
Stand-alone HRAs are not permitted unless they are limited to excepted
benefits or fall under an exemption to the ACA. - Eligible Reimbursements: Section 213(d) medical expenses. Employer can define “eligible medical expenses,” as they apply to Section 213(d) guidelines.
- Are Non-Medical Expenses Covered: No.