Tax-advantaged health care payment options: HSAs and HRAs
Abstract: Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs) are growing in popularity because they’re seen as cost-effective ways to fund health care expenses. HSAs are tax-exempt accounts set up with a qualified trustee to pay for or reimburse qualified medical expenses. HRAs are employer-sponsored programs that reimburse employees. This article looks at the details for each. A sidebar discusses the pros and cons of a third option, the Flexible Spending Account.