Compare HRA, HSA and FSA

Flexible Spending Accounts are a great way to save money on healthcare and childcare costs. Compare plans and accounts below:

2019 Comparison

 

HRA
(Health Reimbursement Arrangement)

HSA
(Health Savings Account)

FSA
(Flexible Spending Account)

Definition

An expense reimbursement plan for qualifying medical expenses. Your employer funds this account.

An account for current and future medical expenses. It requires a high-deductible health plan. You fund this account.

An account for qualifying medical expenses. Either you or your employer fund this account.

Qualifications

Any size group can participate.

You can set up an HSA if you are eligible (ask your employer.)

You can set up an FSA if you are eligible (ask your employer.)

Employee tax savings

Reimbursements for eligible expenses are left out from your take-home pay. You are not taxed on this amount.

Contributions can be pre-tax or are tax-deductible on your personal tax return. Funds earn interest tax-free. Reimbursements for eligible expenses are left out of you take-home pay: You are not taxed on this amount. You can also take out funds for non-medical expenses: This is subject to taxes, however.

Contributions to your FSA are made pre-tax. Reimbursements for eligible expenses are left out from your take-home pay. You are not taxed on this amount.

2019 maximum contributions

Your employer determines the maximum amount you can put into an HRA account.

The IRS determines the maximum amount you can put into an HSA. The maximum contributions for 2019 is $3,500 (single) and $7,000 (family.) If you are age 55 and older, you may be able to contribute more.

Your employer determines the maximum amount you can put into an FSA account. This can't go over the IRS maximum contribution limit. For 2019, that amount is $2,700.

Who owns unused funds?

If there are unused funds in your account, they go back to your employer (Unless benefits are paid from a trust.)

If there are unused funds in your account, they go back to you.

If there are unused funds in your account, they go back to your employer.

Are funds portable?

No.

Yes: Funds belong to you.

No.

Do funds roll over?

Yes, if employer allows it.

Yes.

A plan may be designed to allow up to $500 in unused funds to carryover into the next plan year. If your plan does not have a carryover feature, your employer may establish a grace period to use funds.

Funding requirement

Your employer is not required to fund an HRA.

Funds must be available in your account before you can make a withdrawal. You can contribute to HSA over time, or all at once.

Claims are paid without regard to contribution amount.

2019 deductible

An HRA does not have a minimum deductible.

Deductible is $1,350 (single) and $2,700 (family.)

A healthcare FSA does not have a minimum deductible.

2019 maximum out-of-pocket

Your employer will decide your plan's maximum.

Your 2019 maximum out-of-pocket is: $6,750 (single) and $13,500 (family.)

Your employer will decide your plan's maximum out-of-pocket.

Allowable expenses and plan restrictions overviews

An HRA can be offered alone or with a health insurance plan. It allows otherwise unreimbursed IRS Code 213(d) medical expenses, including certain health insurance premiums. Long-term care services may not be reimbursed. If you also have an HSA, your HRA may be limited to dental and vision expenses, and expenses for preventive care. Over-the-counter drugs and medicines (except insulin) are not eligible unless prescribed by a medical provider.

An HSA is only for people who have:

  • Qualifying high-deductible health plan
  • No high-deductible additional health pan coverage
  • If you are eligible for Medicare, you cannot establish or contribute to an HSA.
  • It allows otherwise unreimbursed IRS Code Section 213(d) expenses, except for most premiums. Over-the-counter drugs and medicines (except insulin) are not eligible unless prescribed by a medical provider.

 

An FSA can be offered alone or with a health insurance plan. Allows otherwise unreimbursed IRS Code 213(d) medical expenses, excluding premiums on qualified long-term care services. If you have an HSA also, your FSA may be limited to dental and vision expenses and expenses for preventive care. Over-the-counter drugs and medicines (except insulin) are not eligible unless prescribed by a medical provider.

Prescription co-pay

Yes, depending on the plan set by your employer.

Yes.

Yes.

Non-medical expense withdrawals

No.

Yes. However, they are taxable and subject to a 20 percent penalty (There is no penalty if age 65 or older, or disabled as defined by Code Section 72.)

No.

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