what is the difference between hsa and hra health plans

 

Aspect	HSA (Health Savings Account)	HRA (Health Reimbursement Arrangement)
Ownership of Account	Owned and funded by the individual	Funded solely by the employer and may be
	and/or their employer.	available for employee use.
Tax Advantages	Contributions are tax-deductible,	Employer contributions are typically tax-
	and earnings grow tax-free.	deductible, and reimbursements for
	Distributions for qualified medical	qualified medical expenses are
	expenses are tax-free.	tax-exempt for employees.
	Can be invested for potential	Interest or earnings on the account
	growth.	are often not available to employees.
Eligibility Requirements	Must be enrolled in a High Deductible	Available to employees as defined by
	Health Plan (HDHP).	employer plan terms.
Contribution Limits	Contribution limits are set by the IRS	Employers determine contribution limits
	annually.	and can vary.
	In 2022, the annual contribution limit	For 2022, employers can contribute up to
	for individuals is $3,650, and for	$5,450 for self-only coverage and up to
	families, it's $7,300.	$11,000 for family coverage.
Portability	Fully portable; the account belongs	Typically not portable; employees lose
	to the individual and moves with them	access to the HRA upon leaving the
	regardless of employment changes.	employer or retiring.
Withdrawals	Can be used for qualified medical	Used exclusively for reimbursing
	expenses at any time.	qualified medical expenses.
	After age 65, funds can be withdrawn	Unused funds may be rolled over to the
	for non-medical expenses without	following plan year (rollover amounts
	penalties (though subject to income	vary by plan design), but not typically
	tax, like a traditional IRA).	portable if you leave the employer.
Role of the Employer	Employers can contribute to the HSA	Employers fund and administer the HRA,
	but it's not required.	determining contribution amounts and
		reimbursable expenses.
Reimbursement Process	Individuals pay for medical expenses	Employees submit receipts for qualified
	out of the HSA and then request	medical expenses to be reimbursed from
	reimbursement.	the HRA, subject to plan rules.