Is an MRA the Same as an HSA? - Understanding the Difference

If you're confused about the terms MRA and HSA, you're not alone. While both are health-related acronyms, they actually refer to different things. Let's break it down:

MRA (Medical Reimbursement Account):

• An MRA is a type of employer-funded account that allows employees to be reimbursed for eligible medical expenses.
• Contributions to an MRA are made by the employer, and the funds belong to the employer until they are used by the employee for medical expenses.
• Unused MRA funds typically do not roll over from year to year, so it's a
  

  If you're feeling puzzled by the terms MRA and HSA, you are not alone. Many people mistakenly believe these two health accounts are the same, but they serve different purposes and have different structures. Here’s what you need to know:

  MRA (Medical Reimbursement Account):

  • An MRA is designed specifically as an employer-funded account, meaning your employer is the one contributing to it. This can help you offset out-of-pocket medical expenses without dipping into your own finances.
  • Employers decide how much money to allocate to an MRA for each employee, so the contributions can vary widely depending on company policy.
  • Unlike HSAs, funds in an MRA typically cannot be rolled over from year to year. Unused funds can be lost at the end of the plan year unless otherwise noted by the employer.

  HSA (Health Savings Account):

  • An HSA, on the other hand, is a tax-advantaged savings account owned by the employee. This means that any contributions – whether from yourself or your employer – belong to you.
  • HSAs offer more flexibility in terms of rolling over funds; you can retain any unused balance at year-end, allowing your savings to grow over time.
  • You can use the funds in an HSA for a wide range of qualified medical expenses, making it a more versatile option for managing healthcare costs.