re: Company is dropping HSA for HRA

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Company will be putting in $2000 for the HRA. More details coming before open enrollment. Anyone have experience with the HRA?

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The benefit of this plan is that the $2,000 is there on day one of the plan year. The first $2,000 of covered medical expenses are paid for by the HRA directly. No debit card, no file for reimbursement, and if on January 1st you get in a situation that has a $2,500 cost... the first $2,000 is covered. You don't have that transition period where you need to build up dollars in an HSA.

Like an HSA, unused dollars roll over - provided you stay with that company.

Two big differences from an HSA.

1) You can't add your own money to an HRA.

2) The HRA money is not YOUR money. IF you leave the company, the money stays with the company.

Think of an HRA as the company is basically going to pay the first $2,000 of expenses for you, for situations in which you are covered by the plan.

A company COULD just put $2,000 a year in everyone's HSA... but then the money becomes property of the employee.

I guess the morale builder is that it gives you protection against early-year medical issues, and there is no need to be reimbursed. I believe the benefits of HSA, however, outweigh these.