HRA vs HSA | Office of Group Benefits

HRA vs HSA – WHAT’s THE DIFFERENCE?

A Health Reimbursement Arrangement, or HRA, is an account that employers use to reimburse employees’ medical expenses, such as deductibles, medical co-pays and eligible medical costs. The HRA funds are available as long as you remain enrolled in the Pelican HRA1000 health plan.

A Health Savings Account, or HSA, is an employee-owned account used to pay for qualified medical expenses, including deductibles, medical co-pays, prescriptions and other eligible medical costs. To enroll in an OGB HSA, you must enroll in the Pelican HSA 775. Both employees and employers can contribute to a HSA, but the funds are owned by the employee. The HSA funds are available even if you are no longer employed by an OGB-participating employer.

Health Reimbursement Arrangement (HRA)	Health Savings Account (HSA)
Funding
Employer funds HRA	Employer and employee funds HSA
Funds stay with OGB if an employee leaves an OGB-participating employer	Funds go with the employee when he/she leaves an OGB-participating employer
Contributions are not taxable	Contributions are made on a pre-tax basis
Only employers may contribute	Employers or employees may contribute
Flexibility
Employer selects the maximum contribution	IRS determines the maximum contribution
Must be paired with the Pelican HRA 1000	Must be paired with the Pelican HSA 775
Contributions are the same for each employee	Contributions are determined by employee and employer
May be used with a General-Purpose FSA	May be used only with a Limited-Purpose FSA
Simplicity
HRA claims are processed by the claims administrator	Employee manages account and submits expenses to the HSA trustee for reimbursement
IRS regulations and the Pelican HRA 1000 plan document govern expenses, funding and participation	IRS regulations govern expenses, funding and participation
Eligible Expenses
Can be used for medical expenses only	Can be used for pharmacy, dental, vision and medical expenses.