HSAs & HRAs

The Employee Benefit Research Institute (EBRI) reports on Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs). Employers first began offering HRAs in 2001 and HSAs in 2004. HRAs are employer-funded and reimburse workers for qualified medical expenses. An HSA is a tax-exempt trust or custodial account set up by an individual to likewise pay for certain medical expenses. EBRI states:

The theory behind these accounts is that when individuals are given more control over funds allocated for health care services, they will spend the money more responsibly, especially once they become more educated about the actual price of health services. Furthermore, these accounts can be used as tax-advantaged vehicles to save for health care expenses in retirement.

In 2009 these plans covered 15-19 million people, representing 9-11 percent of the privately insured market. There was $7.1 billion in 5 million accounts.

Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2009, June 2010
      Issue Brief (pdf, 32pp/546kB)
      Executive summary