HSA vs HRA

Summary

Buy Qualified High-Deductible Health Plan and Marry with Health Savings Account. Employee uses Plan and HSA to pay medical expenses. Unused funds remain in savings account.

Buy Higher Deductible Plan, agree with Employees to reimburse them for difference in deductibles. Unused funds reduce benefit costs.

Ownership

Employee Owns Account.

No Account Must Exist. If created, Employer Owns.

Focus

High Ded + Savings Account = Medical Coverage.

High Ded = ER Savings - Reimbursements.

Flexibility

Must Buy Qualified High-deductible Health Plan (QHDHP). Limited flexibility.

Can Match to Any Plan or be Stand Alone. Can customize to Employer situation.

Biggest Advantage

Employees may be more careful with health matters. Tax-Advantaged spending and saving.

Maximum Savings and Flexibility. Can deliver the same benefits to the employee without buying the same plan.