Differences Between HRA and HSA - Which One to Choose?

General
1

Hello forum…

I wanna understand the differences between Health Reimbursement Arrangements (HRA) and Health Savings Accounts (HSA) as I’m looking at my options for health benefits at work.

Can someone explain the key differences between an HRA and an HSA? What are the main benefits and limitations of each? Additionally, how do they impact my taxes, and which one might be better for long-term savings?

Any personal experiences or advice on which one to choose would be greatly appreciated. Thanks in advance…

2
  • HRAs: These employer-funded plans reimburse employees for qualified medical costs, with tax benefits for both sides.
  • HSAs: These accounts allow contributions from both you and your employer, and these contributions reduce your taxable income.
3

With HSAs, its the employee’s account and unused funds aren’t forfeited at the end of the plan year - that’s why I prefer them over HRAs.