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HSA







HSA / HRA / FSA Summary

Question

HSA

HRA

FSA

Description:

Health Savings Accounts (HSAs) are employee bank accounts designed to help individuals and their families pay for future qualified medical expenses on a tax-free basis.

A Health Reimbursement Account (HRA) allows an employer-funded account to repay the un-reimbursed medical expenses of employees. Employers don't have to pre-fund the entire account; they can simply reimburse employees as they have claims.

A Flexible Spending Account (FSA) allows employees to set aside a certain amount of each payroll check into an account, before paying federal, state, social security or Medicare income taxes. During the year, participants have full access to this account for reimbursement of qualified expenses.

Employer Eligibility:

Employee with a qualified high deductible health plan

All employers

All employers

Contribution Source:

Employee and/or employer

Employer only

Employee or employer but not both

Account Owner:

Individual

Employer Only

Individual

Minimum Deductible:

$1,200 single (2012)
$1,250 single (2013)
$2,400 family (2012)
$2,500 family (2013)

No Limits

N/A

Maximum Contribution:

$3,100 single (2012)
$3,200 single (2013)
$6,250 family (2012)
$6,450 family (2013)

Typically set by employer

Typically set by employer

Catch-up Contribution: (55+)
$1,000 single (2012)
$1,000 single (2013)
$1,000 family (2012)
$1,000 family (2013)

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 rollover to use for subsequent year's health coverage.

Limited (Taxable beyond a defined amount)

No. Use it or lose it.

Does 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.




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