In Focus: New Findings on HSAs versus HRAs


By Stephen Miller, CEBS September 15, 2015

Health Savings Accounts Growing, Especially Among the Better Paid

The number of people with health savings accounts (HSAs) has ballooned, but higher-income families are much more likely to fund the accounts, according to new research findings that show high-income and older tax filers established and fully funded their HSAs at least four times as often as low-income and younger filers. (New York Times)

HSAs with Invested Assets Are Substantially Larger

HSAs in which at least some of the account’s assets were invested in mutual funds were considerably larger than HSAs that kept strictly to money market funds, though relatively few HSA holders are pursuing available investment options. HSAs with investment options also tend to draw larger contributions. (SHRM Online)

More Fodder for HSA vs. HRA Debate

A recent report looks at whether HSAs or health reimbursement arrangements (HRAs) are better at holding down health care spending. The takeaway: total medical cost correlates more with plan design (deductibles, out-of-pocket expenses, etc.) than plan type (HRA vs. HSA). That said, HSA customers exhibited more favorable consumerism shopping behavior compared with those in an HRA, and showed a greater decrease in costs than those in HRAs—especially for outpatient services and prescription drug use. (Cigna)

Employee Satisfaction with HSAs and HRAs Rises

The satisfaction gap is narrowing between employees with traditional health insurance plans and those with consumer-driven health plans consisting of high-deductible coverage plus an HSA or HRA, according to the Employee Benefit Research Institute. (SHRM Online)

Groups Urge IRS to Exclude HSAs and HRAs from Excise Tax

One of the most contentious issues regarding the forthcoming excise tax on high-value health plans (the “Cadillac tax”) is the inclusion of employees’ own HSA contributions, when deferred through a standard payroll-deduction cafeteria plan, as part of the taxable value of the benefit. Employer contributions to HSAs and HRAs will also be subject to the tax, if total health care spending is beyond the annual tax threshold. (SHRM Online)

Health Care Consumerism: HSAs versus HRAs

A look at how HSAs and HRAs differ in terms of ownership, plan design, funding and portability. (SHRM Online)

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