HRA vs. HSA
- Thread starter Fortitude
- Start date
cat daddy
Active Member
That's a tough one to answer because it will depend upon your health and your overall goals with regards to finances. Both plans are tied to high deductible plans. With an HRA your employer will put money in an account to help you satisfy the deductible. With the HSA YOU are the one that puts the money in the account.
You have a $2K deductible on your medical plan which basically means you have to pay for all medical care up to that amount before the insurance pays anything. With the HRA your employer has basically agreed to give you $1K to help you satisfy that amount. That money is in your account on the first day of the benefit year. When you have medical care the bill first is applied to the deductible and then the carrier will check your HRA account. If you have money there, then they will pay the claim with that money. They will use that money until it is depleted and then your have to come out of pocket to pay the rest of your deductible.
With the HSA it will work the same as the HRA when it comes to paying claims, but you are putting the money in that account. Typical plans will have you drafting money from your account on a per pay period basis. $50/70/100, etc. On day one of the benefit year you only have what ever came out on the first pay check. Over time it will grow like our 401K plan, but there is no match from our employer.
Most HRA/HSA plans have lower premiums than tradition managed care plans. The HRA will cost more than the HSA plan.
When you leave your employer the money that is in the HRA account stays with your employer since they put the money in the account. The money in the HSA account is yours to take with you. Young healthy people can use the HSA as a way to help lower their taxes because it is drafted pre-tax. There are some limits on how much you can put into the HSA. The money in both accounts will roll over to the next year if you do not use all of it.
You have a $2K deductible on your medical plan which basically means you have to pay for all medical care up to that amount before the insurance pays anything. With the HRA your employer has basically agreed to give you $1K to help you satisfy that amount. That money is in your account on the first day of the benefit year. When you have medical care the bill first is applied to the deductible and then the carrier will check your HRA account. If you have money there, then they will pay the claim with that money. They will use that money until it is depleted and then your have to come out of pocket to pay the rest of your deductible.
With the HSA it will work the same as the HRA when it comes to paying claims, but you are putting the money in that account. Typical plans will have you drafting money from your account on a per pay period basis. $50/70/100, etc. On day one of the benefit year you only have what ever came out on the first pay check. Over time it will grow like our 401K plan, but there is no match from our employer.
Most HRA/HSA plans have lower premiums than tradition managed care plans. The HRA will cost more than the HSA plan.
When you leave your employer the money that is in the HRA account stays with your employer since they put the money in the account. The money in the HSA account is yours to take with you. Young healthy people can use the HSA as a way to help lower their taxes because it is drafted pre-tax. There are some limits on how much you can put into the HSA. The money in both accounts will roll over to the next year if you do not use all of it.
cat daddy
Active Member
Boss lady shole looking good in the avatar and sig.... :ebrow:
Fortitude
Sybarite
Thanks sha! :swink: Courtesy of my boss friend! :tup: