Which statement correctly describes how Health Reimbursement Arrangements (HRAs) differ from Health Savings Accounts (HSAs) regarding funders?

The statement that HRAs can only be funded by the employer while HSAs can be funded by the employer, employee, or both is correct due to the distinct characteristics of these two types of health accounts.

Health Reimbursement Arrangements (HRAs) are employer-funded accounts that reimburse employees for qualified medical expenses. The employer determines the amount of funding and manages the account. Employees cannot contribute to HRAs, which is a defining feature that emphasizes employer responsibility.

In contrast, Health Savings Accounts (HSAs) are more flexible with funding sources. They allow contributions from multiple parties: employers, employees, or even family members. This means that both the employer and employee can contribute to the account, providing a greater opportunity for savings and investment towards healthcare costs. The autonomous funding design of HSAs encourages individual ownership and management over health savings.

This distinction underscores how HRAs are strictly employer-funded, while HSAs offer broader contribution options and personal ownership, reflecting their different purposes in healthcare financing.