6. HSA vs. HRA HSA HRA Ownership Employee Employer Contributors Employee, employer and/or family members Employer only Annual limits on contributions Federally-set limit No limit; employer usually sets limit Tax Treatment Qualified medical spending exempt from income taxes; employee contributions tax-deductible; employer contributions excluded from gross income and not taxed Employer contributions excluded from gross income; not treated as taxable income to employees
7. HSA vs. HRA HSA HRA Portability Fully portable No requirement; many employers do not make accounts portable Unspent funds Rolls over yearly without limits May roll over yearly but employer may set maximums; funds may revert to employer if employee leaves or retires Qualified medical expense definition Specified by IRS; payment for health insurance premiums may be restricted Specified by IRS Non-medical use Subject to income tax with additional 10% penalty before age 65 Forbidden