HRA vs HSA Checklist (2026) | HSA Tracker

Identify who legally owns the account.

An HSA is owned by you, the individual. An HRA is owned and controlled by your employer. This ownership difference dictates portability, investment options, and what happens if you change jobs.

Determine if the account is portable when you leave your job.

HSA funds go with you always. HRA funds are typically forfeited upon termination. This affects your long-term healthcare savings strategy and emergency fund planning.

Check if you can invest the account balance.

HSAs often allow investment in mutual funds or ETFs for long-term growth. HRAs are almost always simple cash reimbursement accounts with no investment component, missing out on compound growth.

Verify who is permitted to make contributions.

HSAs can be funded by you, your employer, or both, up to the annual limit. HRAs are funded exclusively by the employer; employee contributions are generally not allowed.

Confirm the underlying health insurance requirement.

An HSA requires enrollment in a High Deductible Health Plan (HDHP). An HRA can be paired with various plan types, including non-HDHP coverage, depending on its design.

Note the 2026 HSA contribution limit for your coverage type.

For self-only HDHP coverage, you can contribute $4,400. For family coverage, the limit is $8,750. Contributing over these limits triggers a 6% excise tax each year until corrected.

Add the $1,000 catch-up contribution if you are 55 or older.

This catch-up amount is separate from the annual limit and has not increased since 2009. It helps those nearing retirement boost their healthcare savings tax-free.

Check if your HRA is an 'Excepted Benefit' type with a $2,200 cap.

Only Excepted Benefit HRAs have a statutory limit ($2,200 for 2026). Traditional employer HRAs do not have a federal dollar cap, but your employer sets the maximum.

Review your HDHP's 2026 minimum deductible and out-of-pocket max.

To contribute to an HSA, your HDHP must have a deductible of at least $1,700 (self-only) or $3,400 (family). The maximum out-of-pocket cannot exceed $8,500 (self-only) or $17,000 (family).

Understand that HRA funds do not count toward your HSA contribution limit.

Employer HRA contributions are separate. You can still contribute the full HSA limit even if your employer also funds an HRA for you, provided the HRA type is compatible.

Mark your calendar for HSA contribution deadlines.

You have until your federal tax filing deadline (typically April 15) to make prior-year HSA contributions. HRA funds are typically use-it-or-lose-it within the plan year or have limited rollover.

Confirm the triple tax advantage of your HSA.

HSA contributions are tax-deductible (or pre-tax), earnings grow tax-free, and qualified medical withdrawals are tax-free. No other account offers this combination for healthcare expenses.

Know that HRA reimbursements are tax-free income.

Money you receive from an HRA to pay for qualified medical expenses is not included in your gross income. This is a valuable tax-free benefit, but it's funded solely by your employer.

Document every HSA withdrawal with a receipt for a qualified expense.

The IRS can audit HSA distributions. You must prove withdrawals were for qualified medical expenses to keep them tax-free. Keep digital copies of receipts and explanations of benefits (EOBs) indefinitely.

Remember the 20% penalty for non-qualified HSA withdrawals before age 65.

If you take money from your HSA for non-medical reasons before age 65, you'll pay income tax plus a 20% excise tax. This penalty is steep and should deter using the HSA as a casual savings account.

Check if your HRA allows reimbursement for insurance premiums.

Some HRAs can be designed to reimburse premiums for health, dental, or vision insurance. HSAs generally cannot, except in specific cases like Medicare or COBRA. This can be a key benefit of an HRA.

Evaluate using your HSA as a retirement healthcare fund.

After age 65, HSA funds can be used for any purpose penalty-free (ordinary income tax applies if not for medical expenses). This makes it a powerful supplement to retirement savings, specifically for high healthcare costs later in life.

Compare the HRA's value against a higher salary or better HDHP.

An employer might offer an HRA instead of a richer health plan. Calculate if the HRA amount truly offsets a higher deductible or premium. Sometimes, a higher salary with an HSA option is better financially.

Plan for HSA funding during a job change with an HRA.

If you leave a job with an HRA, you lose those funds. Ensure you have enough in your personal HSA or emergency fund to cover medical expenses until new coverage begins, avoiding credit card debt.

Coordinate HSA and HRA usage for family dental and vision.

If you have a Limited Purpose HRA for dental/vision, use those funds first for those expenses. Save your HSA money for other medical costs or let it grow invested, maximizing the long-term value of both accounts.

Consider the investment options within your HSA provider.

Not all HSA providers offer low-cost investment options. If you plan to invest for the long term, compare providers like Fidelity or Lively for their fee structures and fund choices to minimize costs.

Use an HSA to reduce your taxable income if you're self-employed.

For self-employed individuals, HSA contributions are an above-the-line deduction, reducing your adjusted gross income (AGI). This can lower your tax bill and potentially qualify you for other deductions or credits.

Verify that the expense is for the diagnosis, cure, mitigation, or prevention of disease.

This is the IRS's core definition of a qualified medical expense. It covers doctors, prescriptions, hospital care, and many over-the-counter items. Cosmetic procedures or general health supplements usually do not qualify.

Confirm that mental health therapy and treatment are eligible.

Costs for psychologists, psychiatrists, and licensed clinical social workers for treatment are qualified expenses. This includes telehealth therapy sessions, which have become more common and are a key use for these accounts.

Check if dental and vision care are covered under your specific HRA.

While HSAs always allow dental and vision expenses, some HRAs (like Limited Purpose HRAs) are restricted to only these categories. Using HRA funds for ineligible expenses could require you to pay them back.

Document mileage for medical travel at the IRS rate.

You can reimburse yourself from an HSA or HRA for travel to and from medical appointments. Keep a log with dates, miles, and purpose. The standard mileage rate is set annually by the IRS.

Save itemized receipts, not just credit card statements.

A credit card statement showing a payment to a pharmacy is not sufficient for an IRS audit. You need the detailed receipt listing the specific medications or services purchased to prove they were qualified.

Review the annual list of eligible OTC medications.

Eligible OTC items include pain relievers, allergy medicine, bandages, and menstrual products. Items like vitamins for general health or toothpaste are not eligible unless specifically prescribed for a medical condition.