Professional Insurance Programs

Health Reimbursement Arrangement (HRA) Vs. Health Savings Account (HSA)

Our office frequently gets calls regarding Health Reimbursement Arrangements and Health Savings Accounts. Below you will find information to better assist you in understanding the difference between the two plans.

What is a Health Reimbursement Arrangement (HRA)?

A Health Reimbursement Arrangement (HRA) is funded by the employer. The employer can choose which expenses they would like the HRA to pay for, and then they use the account to reimburse some or all of the employee’s health care expenses.

Who may participate in and contribute to a Health Reimbursement Arrangement (HRA)?

Rules for participation in HRAs are set by employers, and only employers are able to contribute to the account on behalf of their employees.

What is a Health Savings Account (HSA)?

A HSA is established either by an individual or employer, and allows tax-free money to be set aside in a trust or savings to cover health care expenses that may arise. HSAs must be used in conjunction with high-deductible health insurance plans.

Who may participate in and contribute to a Health Savings Account (HSA)?

Individuals are able to participate in an HSA if they are covered by high deductible health insurance plan (HDHP), not covered by any other health plan that is not a HDHP, not claimed as a dependent on someone else’s tax return, and not currently enrolled in Medicare.

The people able to contribute to the HSA include the employer, the employee, family, or any other person that wishes to put in money.

While there are many more components to both the Health Reimbursement Arrangement and Health Savings Account, the information provided will help to differentiate between the two. Both serve as excellent ways to lower your health insurance premiums.

Contact us at with any questions.