HRAs differ from Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) primarily in terms of funding and ownership. HSAs are employee-owned accounts that can be funded by both the employer and the employee and are available only to those enrolled in a high-deductible health plan. FSAs are typically employee-funded through salary reductions, although employers can also contribute. Unlike HSAs and FSAs, HRAs are entirely employer-funded, and any unused funds in an HRA can be rolled over to the next year at the employer’s discretion.
Here’s a chart comparing Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs):
| Feature | HRA (Health Reimbursement Arrangement) | HSA (Health Savings Account) | FSA (Flexible Spending Account) |
|---|---|---|---|
| Funding | Employer-funded only | Employee and/or employer-funded | Employee-funded, employer may contribute |
| Ownership | Employer-owned | Employee-owned | Employer-owned |
| Eligibility | No specific eligibility requirements, varies by employer | Must be enrolled in a high-deductible health plan | Available through employer with no specific health plan requirement |
| Contribution Limits | No legal limit, set by employer | Set by IRS, subject to annual changes | Set by IRS, subject to annual changes, employer may impose a lower limit |
| Portability | Not portable, stays with the employer | Portable, stays with the individual | Not portable, stays with the employer |
| Rollover of Funds | Varies by plan, generally allowed | Funds roll over annually without limit | Limited rollover allowed, subject to plan terms |
| Qualified Expenses | Broad range of medical expenses, can be limited by employer | Broad range of medical expenses, defined by IRS | Broad range of medical expenses, defined by IRS |