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Unraveling the Mystery HSA and HRA – Decoding the Difference

Understanding the differences between HSA and HRA is essential for selecting the right option that aligns with your business goals.

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Unraveling the Mystery HSA and HRA – Decoding the Difference

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  1. Unraveling the Mystery: HSA and Unraveling the Mystery: HSA and HRA – Decoding the Difference! HRA – Decoding the Difference! Health Savings Account (HSA) and Health Reimbursement Arrangement (HRA) Explained: 01 PURPOSE AND OWNERSHIP: HSA: Individual savings account for qualified medical expenses. HRA: Employer-funded account to reimburse employee medical expenses. 02 FUNDING: HSA: Contributions by individual and/or employer, tax-deductible, rollover. HRA: Employer contributions, not tax- deductible, limited rollover. 03 PORTABILITY: HSA: Portable, even with job changes or insurance plans. HRA: Generally not portable; funds tied to the employer. 04 ELIGIBLE EXPENSES: HSA: Broad range of qualified medical expenses, some restrictions. HRA: Employer-customized expenses for reimbursement. 05 ACCOUNT OWNERSHIP AND VESTING: HSA: Owned by individual, stays with them. HRA: Owned by employer, not usually portable. HSA Example: Sarah Contributed to HSA via payroll and personal contributions. Used HSA for deductible, surgery costs, and follow-ups. Funds rolled over annually, portable, flexible control. HRA Example: John Employer-funded HRA for eligible medical expenses. Reimbursed for specialist visit per company guidelines. No direct ownership, not portable upon job change. Opening an HSA: General Steps Verify eligibility (HDHP requirement). Research HSA providers (banks, credit unions, online). Gather personal and HDHP details. Complete application (online, phone, or in person). Fund your account (individual and/or employer contributions). Designate beneficiary (optional). Review HSA rules and regulations. Start using your HSA for eligible expenses. 8. 1. 2. 3. 4. 5. 6. 7. Notable HSA Providers: 1. 2. 3. 4. 5. 6. Optum Bank Fidelity HealthEquity HSA Bank ConnectYourCare Further www.getsmartquotes.com

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