| |
Health Savings Account(HSA) |
Heath Reimbursement Account(HRA) |
Flexible Savings Account(FSA) |
| Description |
Approved by Congress in 2003, they are actual bank accounts in employees’ names that allow employees to save and pay for medical expenses tax-free. |
Provides more control for the employer who may setthe contribution level, determine services to be covered, and retain control over unused funds. |
Allows employees to pay out-of-pocket expenses for copays, deductibles and certain services not covered by medical plan, tax-free.Only option that allows employees to pay for dependent care tax-free. |
| Employer Eligibility |
Employee with a qualified high deductible health plan. |
All employers |
All employers |
| Contribution Source |
Employee and/or employer |
Employer only |
Employee and/or
employer |
| Account Owner |
Individual |
Employer |
Individual |
| Underlying Insurance Requirement |
High deductible health plan |
None |
None |
Minimum Deductible
(2010) |
$ 1,200 single
$ 2,400 family |
No limits |
N/A |
Maximum Out of Pocket
(2010) |
$ 5,950 single
$ 11,000 family |
N/A |
N/A |
Maximum Contribution
(2010) |
$ 3,050 single
$ 6,150 family |
Typically set by employer |
Typically set by employer |
| Permissible Use Of Funds |
Employees may use funds any way they wish. If used for non-qualified medical expenses, subject to current tax rate plus 10% penalty. |
Reimbursement for qualified medical expenses
(as defined by tax code). |
Reimbursement for qualified medical expenses
(as defined by tax code). |
| Cash-Outs of Unused Amounts (if no medical expenses) |
Permitted, but subject to current tax rate plus 10% penalty (penalty waived after age 65). |
Not permitted |
Not permitted |
| Year-to-year rollover of account balance? |
Yes, may roll over to use for subsequent year’s health coverage. |
imited
(Taxable beyond a defined amount.) |
No.
Use it or lose it.
|
| Does the account earn interest? |
Yes |
No |
No |
| Portable? |
HSA owned by individual: portable year-to-year and between jobs. |
Limited:Ex-employee may have access at employer’s discretion. |
Employee forfeits balance at end of year and upon termination. |
This comparison is intended as a summary only. Please see plan document for complete explanation and IRS limitations.