The main difference between HSA and HRA is who funds and administers the account. HSA stands for Healthcare Savings Account, while HRA stands for Healthcare Reimbursement Account. The HRA may be initiated by an employee, an employer, or both. On the other hand, an HSA may only be started and accessed by the employer.
HSA has tax advantages, which makes it idyllic for most people. A person must have high deductibles to be able to meet the criteria under the legal terms of a high deductible medical plan. HSA functions like bank account. There has to be money already there for the money to be withdrawn. HRA, on the other hand, is funded, controlled, and operated by the employer.
So, when medical expenses come up and qualify for reimbursement, the employer doesn’t have to have any assets, he can write a check and sees to it that bookkeeping tallies the funds under HRA for reference purposes.
Answer Anonymously
Copy Link
