Short answer: HRAs, FSAs, and HSAs all provide tax advantages for healthcare expenses, but they differ in who owns the account, who can contribute, whether the funds are portable, and when the money is available.
HRAs (health reimbursement arrangements) are employer-funded and employer-controlled. Employees generally do not “own” an HRA balance and typically access the benefit through reimbursements for eligible expenses under the employer’s plan rules. Whether any unused amount can be carried forward, and whether anything remains available after employment ends, depends on how the employer designs the HRA.
HSAs (health savings accounts) are owned by the employee and are portable. Both the employee and employer may contribute, and the balance can roll over year to year. To be eligible to contribute to an HSA, the individual generally must be enrolled in an HSA-qualified high-deductible health plan (HDHP) and meet other eligibility rules.
FSAs (health flexible spending arrangements) are employer-sponsored accounts usually funded through employee payroll deductions, sometimes with employer contributions. The key practical difference is that the employee’s full annual election is generally available from the beginning of the plan year, but unused funds are usually forfeited unless the employer offers a permitted rollover or grace period.
Quick comparison (summary table):
| Feature | HRA | HSA | FSA |
|---|---|---|---|
| Who owns the account | Employer | Employee | Employer (funds earmarked for employee use) |
| Who can contribute | Employer only | Employee and/or employer | Employee (employer may also contribute, with limits) |
| Portability | Generally not portable | Fully portable | Not portable |
| Fund availability | Reimbursement-based, set by employer | Available as funds accumulate | Full annual election available Day 1 |
| Rollover of unused funds | Employer decides | Yes, rolls over indefinitely | Limited rollover or grace period |
| Eligible expenses | Set by employer (within IRS rules) | Set by IRS | Set by IRS |
| Must be paired with a health plan? | Often, yes | Yes, must have an HDHP | No |
| Can reimburse premiums? | Sometimes (common with ICHRA/QSEHRA) | Only in limited situations | No |