What is the difference between an HSA and an HRA?

An HSA is a tax-advantaged savings account that employees and employers can contribute to, up to the annual maximum limit. An employer can offer an HSA as part of their company’s benefits package, or an individual can open one on their own. In either case, the individual always owns it and the funds inside — even if they leave their employer’s organization. An HRA is a personalized health benefit that lets employers contribute tax-free money toward employees’ individual health plan premiums. With a CHOICE Arrangement, there are no minimum or maximum contribution limits. HSA funds roll over annually and remain with the employee indefinitely, while unused HRA funds remain with the employer at the end of the plan year or if an employee leaves their company.

Can you use HSA funds for health insurance premiums?

You can’t use your HSA to pay for individual or group health insurance premiums. However, the IRS allows account holders to pay premiums for COBRA coverage, health coverage while receiving unemployment compensation, qualified long-term care insurance, and Medicare Parts A, B, C, and D after age 65. If your employer offers a CHOICE Arrangement, they can design the benefit to allow tax-free payments toward employees’ individual health plan premiums.

Can you have an HSA and an ICHRA at the same time?

Yes. An HSA can pair with an ICHRA, now called the CHOICE Arrangement, if the plan design meets HSA eligibility rules. This means the CHOICE Arrangement must limit reimbursement to employees' health insurance premiums, as well as dental and vision expenses. Alternatively, employers can limit the ICHRA to reimburse out-of-pocket expenses only after employees reach their deductibles. A standard ICHRA can make an employee ineligible for an HSA because it could reimburse all qualified healthcare costs outlined in IRS Publication 502.

What happens to your HSA if you change jobs?

Your HSA stays with you when you leave an employer. You keep the account balance, including any employer contributions deposited, and can continue using the funds for qualified medical expenses. You can contribute to the account at a new job or on your own.

What happens to HSA funds you don't use by the end of the year?

Unlike a health FSA, unused HSA money rolls over automatically from year to year. You don't have to spend the funds by December 31, and you can continue saving or investing eligible funds for future healthcare expenses.

Remodel Health ICHRA Insights

Remodel Health and Lively bring HSAs into the CHOICE Arrangement experience

Learn how Remodel Health and Lively are integrating HSAs with CHOICE Arrangements to simplify enrollment and give employees more flexible health benefits.

Nov 3, 2026, 8:33:29 AM 8 min read