There are three basic types of medical savings accounts: health savings accounts (HSAs), health flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs). Although these accounts all provide a tax-advantaged way for employees to pay out-of-pocket medical expenses, each type of account is subject to its own set of requirements. Each account also has its own set of advantages for both the employer and employees.
The following chart compares four key features of HSAs, health FSAs, and HRAs:
- General Rules
- Contributions
- Spending Rules
- Additional Compliance
Employers can use this chart to help determine which type of medical savings account best fits their workforce’s needs.
*For purposes of this comparison chart, an HRA refers to a traditional HRA. It does not include special types of HRAs, such as retiree-only HRAs, individual coverage HRAs (ICHRAs), qualified small employer HRAs (QSEHRAs) or excepted benefit HRAs. For more information on these types of HRAs, please contact Parrott Benefit Group.
This resource is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2024 Zywave, Inc. All rights reserved.
