How To Make the HSA and HRA Work Together

As HRAs and HSAs grow in popularity, our staff often get questions regarding these two popular options and what they can do with them to maximize their tax savings for their employees and the business.  So many want to know, “Can we do an HRA and an HSA at the same time” or “How can we make the HSA and HRA work together?

The answer is:  Yes.  Let’s show you how to make the HSA work with the HRAs BASE® has to offer! 

Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) fulfill different functions, but are both valuable, and when put together, can provide the best outcome for both the employer and employee. 

The HRA is an employer-funded health benefit plan, or arrangement between employee and employer, that the employer sets and provides an allowance each month that the employees use to purchase qualified health care expenses.  To participate, the employee must follow the rules of the HRA. 

The HSA is an account owned by the employee that both the employer and employee can make contributions to, helping the participant pay for health care expenses or to save for the future by investing funds to build wealth.  To participate, the employee must be enrolled in a High-Deductible Health Plan (HDHP). 

HOW TO:  Make the HSA work with the Integrated HRA

The Integrated HRA is for small employers with a group health plan looking to lower the cost of health insurance premiums while keeping the employees’ coverage the same, supplementing their deductible costs. 

To make it work, the employees must be enrolled in the employer’s High-Deductible Health Plan (HDHP).  With both an HSA and the Integrated HRA, the employees can use their Integrated HRA funds to cover health care expenses not covered by the HDHP and use their HSA for unexpected health care expenses, bigger health care expenses, or save for the future. 

HOW TO:  Make the HSA work with the QSEHRA. 

The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is for small employers with less than 50 full-time employees, without a group health plan, to reimburse employees for qualified health care expenses. 

To make it work, the employee must have HDHP-QSEHRA eligible coverage and employer must adapt the QSE to work with the HSA.  With both an HSA and the QSEHRA, the employees can use their QSEHRA funds to purchase their own HDHP and use the money from their HSA to fund the expenses that their HDHP does not cover. 

HOW TO:  Make the HSA work with the ICHRA. 

The Individual Coverage Health Reimbursement Arrangement (ICHRA) is for small employers to provide their employees with tax-preferred funds for qualified insurance premiums and/or qualified insurance premiums and out-of-pocket health care expenses.  The employers can choose to offer to all employees, or to a specific class, with no contribution cap. 

To make it work, the employee must have HDHP-ICHRA eligible coverage.  The ICHRA must be set up to reimburse premiums only for the employee to be eligible to make contributions to their HSA and cannot be used to reimburse premiums AND health care expenses.    

When the HRA and HSA are combined, and set up properly, these two health benefits provide employees with the greatest possible assistance from their employer, helping the employer save money and recruit and retain the best employees. 

To make an HRA work with the HSA, maximizing the tax savings and benefits, there may be a few adaptations required.  Let BASE® create the best custom tax-advantaged benefits package for your business.  For more information, call BASE® at 888.386.9680 or visit

BASE® Debunks 5 Health Savings Account Misconceptions

Health Savings Accounts (HSAs) continue to grow in popularity yet remain one of the most misunderstood solutions in an employer’s benefit strategy.  With many misconceptions, the gist of the HSA is that it is a type of personal savings account set up to pay for health care costs now, or in the future, with the opportunity to diversify retirement portfolios!

The BASE® Health Savings Account (HSA) is designed to help individuals save and pay for qualified medical expenses, while allowing the opportunity to save for the future, and/or invest funds.  The HSA allows employees in a qualifying High Deductible Health Plan (HDHP) to save money on a pre-tax basis to pay for qualifying medical expenses now or in the future.

The HSA is available to businesses of any size with an HDHP in place with an opportunity to provide a means for their employees to pay for thousands of eligible items such as copays, over-the-counter medications, dental, vision, and more with tax-free dollars.  HSAs offer a triple tax break – contributions are pre-tax, the money grows on a tax-deferred basis, and can be used tax-free for eligible medical expenses.

Below, we will debunk a few of the misconceptions of the HSA:

MISCONCEPTION 1 - You Can’t Take Your HSA with You When You Change Jobs:  An employee can take the HSA with them when leaving a job, unlike the FSA.  The employee can maintain the HSA through the current administrator or roll over to a new one.  As long as the employee maintains, or enrolls in a new HDHP, the employee can continue to contribute to the HSA.

MISCONCEPTION 2 - The HSA Funds Must Be Used by Year-End:  This is one of the biggest misconceptions.  Unlike the FSA, the HSAs do not have a use-it-or-lose it rule.  The money rolls over from year to year and can be used to pay for medical expenses at any time.  

MISCONCEPTION 3 - HSAs Are Complicated:  HSAs are a simple way to reduce taxable income, cover qualified health care expenses, and invest for the future.  We know that when it comes to health care, things can be complex, but these pre-tax savings accounts are one of the easiest solutions for paying for health care expenses.

MISCONCEPTION 4 - It is a Health SAVINGS Account, Not Health SPENDING Account:  For many, the HSA is a quick and easy way to pay for their everyday health care expenses.  But by only utilizing the account for health care expenses, employees are not using their HSA at its fullest potential.  The HSA can be used for both health care expenses and investment opportunities that allow the employee to invest once the employee has met the threshold.

MISCONCEPTION 5 - HSAs are Only for Older/ Sick Employees:  The HSA is for any eligible employee, regardless of age or health.

We want every business to experience the BASE® Difference.  With BASE®, employers will be offered a custom technology solution custom to their business alongside a service experience that is second to none.  Employers will experience:

  • Multi-account coordination
  • Online portals to serve them and their employees, along with an easy-to-use mobile app
  • Flexible contribution options and debit card for employees
  • Comprehensive planning & reporting
  • And more

The BASE® HSA offers excellent tax benefits to help individuals make the most of every health care dollar, making it a powerful tool for diversifying retirement portfolios.  For more information, call BASE® at 888.386.9680 or visit