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HRA vs. HSA: Which is Better?

Jeff Griffin

Let’s face it, healthcare has become a major expense for everyone in this country. To help offset a portion of this costly burden for employees, employers typically offer two very popular tax-advantaged savings accounts: HRAs and HSAs. But what’s the difference between these two healthcare savings plans, what are the legal distinctions, and which is better for your employees and your company?

Making an informed decision about these tax-advantaged reimbursement plans can help you maximize the benefits for both your employees and your company.

(For a side-by-side comparison of these plans, including comparisons to FSAs and QSEHRA tax-advantaged accounts, click here to download our four page guide.)

Defining HRAs and HSAs

Not to be confused with a flexible spending account (FSA), an HSA, or health savings account, is a savings account specifically linked to a qualified high deductible health plan (HDHP); it’s meant to help offset the higher out-of-pocket expenses that potentially come with plans of this design.

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Topics: Cost Containment, HSAs, HRAs, CFO, Consumer Driven Healthcare, High Deductible Health Plans

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Unpacking the Differences Between Employee Benefits HRAs and HSAs

David Rook

Everyone - employers and employees alike - know all too well that the world of healthcare coverage is confusing. As they say in the movies, “It’s complicated.” Yet despite the confusion, there's simply no stopping the trend towards consumer-driven healthcare coverage.

That’s why it's time to unpack the facts about workplace health spending accounts, otherwise known as Health Reimbursement Accounts (HRAs) and Health Savings Accounts (HSAs) - with a focus on how to view their costs and benefits.

Before we dive into the benefits of each one, let’s start with clarifying what they are.


HRAs come in many flavors, including Retiree HRAs, Stand-Alone HRAs, One-Person Stand-Alone HRAs, and Integrated HRAs, which are also known as Group HRAs, Linked HRAs, or Deductible-Only HRAs.  For purposes of this discusion, we are talking about Integrated HRAs - those linked with a High Deductible Health Plan (HDHP). 

This type of HRA is designed to help offset the cost of higher deductibles and is only offered to employees and their dependents who enroll in the group health insurance plan. Only the employer contributes to the HRA, and only the employer owns the account. An employer will typically set aside a dollar amount per employee per year that can cover some portion of group plan premiums, co-pays, and deductible expenses. This does not mean, however, that funds accumulate in a separate account; employers only pay after employees incur healthcare expenses.

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Topics: Employee Benefits, HSAs, HRAs

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