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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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HSA vs. HRA bank accounts

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: I came to your explanation page expecting to find HRA references and an HRA account application, but found discussion only of HSAs. Is the debit card discussion equally applicable to HRAs? Will First American Bank handle an HRA account?

A: No, these are entirely different and there are no common issues with regard to the setup, taxation or administration of HSAs vs. HRAs. "HSA" stands for "health savings account", a program available to individuals and businesses with a certain type of high deductible health insurance. "HRA" stands for "health reimbursement arrangement" and sometimes referred to as "health reimbursement account". HRAs are set up administered entirely within the accounting systems of the employer and an external claims administrator if the plan covers uninsured health expenses. Usually there are no separate bank accounts for employees' benefits, but this is an available option. If a bank account is established it must not be a trust account (as with HSAs) and the account must be owned by the business and listed with the employer's tax ID number. In contrast, HSAs are always opened as a trust account for the benefit of the employee and are never owned by the employer.


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