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How is a HRA different from a HSA or FSA?

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This is a blog about REAL questions with REAL answers from REAL people for REAL business owners and professionals.  How many times have you had questions about payroll or just business or tax questions in general, but couldn't figure out exactly what to ask or who to ask it to?  I hope it's comforting to know you're not the only one this happens to!  I felt the same way in the beginning, many  years ago.  It's actually what drove me to this profession in 1984!  Now, after decades of helping thousands of people, just like you, I'm writing this blog to help YOU!  So dig in - see if some of our questions and answers put words to your thoughts.  We're here to help - so reach out to us with your every-day challenges and we'll create a post just for you!

REAL questions with

REAL answers from

REAL people for

REAL business owners

What is a HRA?

An HRA (Health Reimbursement Account) is an account set aside to help you pay for qualified health care services and eligible medical expenses. It is typically connected with a health plan. You do not contribute money to this account, only your employer, therefore you do not own the account or the money in the account. You do not pay any federal or state income taxes on this money. 

 

Your employer may put all the contribution into the account in 1 lump sum at the beginning of the year or they may choose to do it monthly. There is no limit for you since you don’t contribute to this account. Your employer can limit the amount of carry over allowed. 

 

You cannot cash out this account. If you don’t use it and leave your employment, the account stays with your employer. 

 

Definitions:

Qualified Medical Expense: a health care service, treatment or item that the IRS says can be purchased without having to pay taxes.

Eligible Medical Expense: a health care service, treatment or item that the IRS says can be covered or reimbursed (paid back) by a benefit plan.

 

Next week: Side by side comparison of FSA, HRA and HSA.

 

 

Find out more about our Services and Who We Are. Make this the best decision of your day.

At Payroll Vault, we want to be an extension of your business team. 

We're available, accessible and affordable.  Reach out today.

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Published on:

January 09, 2019

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