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• Account Education
• Types of Accounts
• • Account Comparison
• Eligible Account Expenses
• Merchants that Accept
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• Account Savings Calculators
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Types of Accounts

There are two primary CDH accounts available for employers:

• Health Savings Accounts HSAs are the optimal incentive to change consumer behavior because consumers own the account. Contributions are tax-free, interest is earned tax-free, and healthcare expenditures are not taxed. Also, at age 65, HSA dollars may be used for non-medical expenditures while taxed at the then-current rate. An HSA requires a high deductible health plan. HSAs do not require substantiation, however, and some employers are concerned monies may be spent on non-healthcare items. HSAs are owned by the employee and are 100% vested immediately.
• Health Reimbursement Arrangements HRAs are sometimes favored by employers because they provide more control on what expenses are reimbursed, and because HRAs are notional accounts – they are funded only when the reimbursements are made. Also, an HRA is usually not portable should the employee leave the employer. HRAs do not require a high deductible health plan.

As more has been learned about CDH and best practices in plan design, optimal solutions combine multiple accounts. These are called stacked or multi-purse accounts. For example, a CDH plan design might utilize an HDHP in combination with a Health Savings Account HSA for medical use and an optional limited-use Flexible Spending Account FSA for vision and dental.

Flexible Spending Accounts – Training Wheels for CDH

Flexible Spending Accounts FSA can be thought of as a primer for CDH. (FSAs) require employees to budget their healthcare expenses for the year while they manage and spend their own tax-advantaged dollars. FSA help ease employers and employees into CDH because the same principles generally apply to CDH accounts except CDH accounts roll over year to year and HSAs are portable to the employee. Furthermore, the same general rules apply to items purchased with FSAs funds and HRA funds.