is set up by the employer who decides how much money goes into the plan
can t withdraw funds first then pay expenses must pay first and then wait to get reimbursedhealth reimbursement arrangements vs other arrangementsan employee with both an fsa and an hra and an expense that is eligible to be reimbursed through both plans can t choose which will cover the expense instead the costs will be reimbursed by the plan that the employer has set up to pay first when this primary plan has been depleted the second plan will be used to cover any subsequent eligible medical expenses that are reported for reimbursement here s a closer look at two other options for funding out of pocket medical expenses a flexible spending arrangment fsa is funded using a portion of an employee s pre tax salary 4 in contrast to an hra each employee determines how much money should go into these arrangements annually up to 3 050 in 2023 and 3 200 in 2024 1617unused funds in hras may be carried over to the following year according to the employer s discretion 18 unused fsa funds generally cannot be used in the next plan year although an employer may offer either a short grace period 2 5 months or allow up to 640 to be carried over 16compared to an hra a health savings account hsa is a fully vested tax advantaged account that is not subject to forfeiture if funds remain in the account at the end of the year an hsa is paired with a high deductible health plan hdhp to pay for medical and dental expenses the employee or employer funds the account and like an fsa cannot be used to pay insurance premiums unlike hras and fsas employees can keep their hsas if they change employers 19