HSA

HRA

FSA

What does the acronym stand for?

Health Savings Account

Health Reimbursement Arrangement

Health Care Flexible Spending Account

What is the legal authority?

Medicare Prescription Drug, Improvement, & Modernization Act of 2003 and supplemental guidance from the IRS

IRS Guidance 2002-45

IRS code Section 125

Who is eligible?

Member must be enrolled in a High Deductible Health Plan (HDHP). The member may not be enrolled in other general medical insurance coverage or Medicare and may not be claimed as a dependent on another person's tax return (but may be a spouse filing jointly).

This account must be created by an employer and the employer determines the eligibility based on the health insurance plans offered.

This account must be created by an employer and should be available for all employees covered under their insurance plan.

Who own's the account?

Member

Health insurance plan

Member

Is it portable?

Yes.  The money in the account belongs to the member.

No.  If you leave the employer, the money belongs to the employer.

No.  The money belongs to the employer.

Will my balance be forfeited after a certain amount of time?

No.

The health insurance plan's credits must be used while the member is covered by that plan. Unused credits are forfeited if the member terminates employment or changes health plans.

Yes. Unused balances are forfeited annually. Expenses must be incurred by year's end (or by termination of employment, if before year's end). Otherwise, the employee loses unused funds.

Can the account balance be carried over to next year?

Yes.

Yes.

You must use the money by the end of the plan year.  Use it or loose it

Can the balance be used for retirement income?

Yes.  After 65, this money can be withdrawn as taxed income.

No.

No.

Who contributes to the account?

Both Employer and employee (or individual member) can contribute.

Only the employer

Usually only the employee, although employer can also contribute.

Does interest accrue?

HSA accrues interest on a tax deferred basis

No

No

Is the annual amount of the contribution available on the first day of coverage?

No. Only the amount already contributed to the account by the employer and/or the individual are available for reimbursement

It depends on the way the health plan chooses to administer this benefit.

Yes. The annual amount the employee elected is available on the first day of coverage regardless of the amount contributed by the date of the reimbursement request.

Is proof of expenses required?

No. The member should be prepared to substantiate to the IRS that the expense has been incurred, the amount of the expense, and its eligibility.

Yes. IRS regulations governing HRAs require that each claim be substantiated by an "explanation of benefits" statement or through itemized receipts.

Yes. IRS regulations governing FSAs require that each claim be substantiated by an "explanation of benefits" statement or through itemized receipts. Some expenses may require a letter of medical necessity from the employee's physician.

Can it be integrated with other accounts, i.e. an FSA or HRA?

No. If the member is enrolled in an HDHP with an HSA, participation in a general FSA is usually not allowed.

Yes. If the employee is enrolled in an HDHP with an HRA, participation in an FSA is allowed. However, the employee may loose the HSA eligibility for  the plan year.

No.