|Nov. 14, 2019 | www.fisherphillips.com|
A Health Savings Account (HSA) is a popular vehicle for paying health care costs. Employees find HSAs attractive because they can control the amount of money contributed, determine when to withdraw money, and enjoy the benefits of what is essentially a tax-favored savings account – money can be contributed, earned, and distributed for qualified expenses on a tax-free basis. Not to mention the fact that HSAs are portable.
Health Reimbursement Arrangements (HRAs) are account-based health plans funded with employer contributions to reimburse eligible participants and dependents for medical expenses. Prior to the Affordable Care Act, HRAs were not uncommon.