What Is the Difference Between an HRA and an HSA?

Save
Next Video:
What Is Premium Conversion?....5

The difference between an HRA and an HSA is that a Health Retirement Account is generated by an employer and a Health Savings Account is something an individual sets up on their own.

Part of the Video Series: Health Insurance Information
Promoted By Zergnet

Video Transcript

This is John Pinelli, financial representative, talking to you today, about the differences between an HRA and an HSA. An HRA, Health Retirement Account, is an account that is generated by your employer,where they put in a certain amount of money for you each year, and if you use that money for qualified medical expenses, that's great. It's there for you. However, if you do not use that money by the end of the year, you don't get a portion of that. Whereas a health savings account, is something that you participate in on your own. It's portable, it's not within your company. The way it works, is you do contribute dollars to it, and the dollars that you contribute to it, are not taxed when you put it in. Now, if you do not use that money, during the course of the year, it has the advantage of rolling over into the next year, so you could accumulate this money, one year not use it, another year not use it, whereas the third year, all the sudden you need fifteen thousand dollars. Well, it's nice, you've got this amount in the HSA there for you, that you've built over the last three years, and there are tax advantages to it, as well, so it's nice to have, and if you do have an HRA, that's very nice too. That means your employer is contributing this amount of money for you each year, potentially, and if you need it, you have it there, and typically, you won't have to participate in this. The employer will make all the contributions themselves, so those can also be very nice, too, so this has been John Pinelli, financial representative, talking to you today, about the differences between HRAs and HSAs.

Featured

Related Searches

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!