HSA vs. HRA vs. FSA Comparison

HSA vs. HRA vs. FSA Comparison2020-11-16T10:12:21-05:00

Health savings accounts (HSAs), health reimbursement arrangements (HRAs), and flexible spending accounts (FSAs) can all help you pay for qualified expenses related to your health care, which frequently include things like deductibles, copays/coinsurance, and prescription costs. However, there are some important account comparisons you should consider when determining which account is the best fit for your needs.

Check out our account comparison below:

 

Health Savings Account (HSA)

Health Reimbursement Arrangement (HRA)

Flexible Spending Account (FSA)

Account OwnershipEmployee/ IndividualEmployer (held in employee’s name)Employer (held in employee’s name)
Deposits Made ByEmployer, employee or bothEmployerEmployer, employee or both
Separate AccountRequired; IRA-type accountNot required; can be paid from employer assetsNot required; can be paid from employer assets
Expenses CoveredMedical, dental, vision, prescription and over-the-counter expenses. COBRA, retiree medical insurance premiums, LTC premiums or expense – Reference: IRC § 213(d)Medical, dental, vision, prescription and over-the-counter expenses. Post-tax insurance premiums. – Reference: IRC § 213(d)Medical, dental, vision, prescription and over-the-counter expenses – Reference: IRC § 213(d)
Accompanying Plan Requirements

Must be covered by qualified HDHP and not covered by any plan that covers medical expenses under the deductible

HDHP Minimum Deductible:
2021: $1,400 single; $2,800 family
2020: $1,350 single; $2,700 family

Maximum Out of Pocket:
2021: $7,000 single; $14,000 family
2020: $6,900 single; $13,800 family

Generally, must be integrated with group medical plan meeting health care reform requirementsNone
Contribution Limits

2021: $3,600 self-only; $7,200 family; Catch-up: $1,000

2020: $3,550 self-only; $7,100 family; Catch-up: $1,000

None

2021: $2,750 per plan year

2020: $2,750 per plan year

The limit is per person. Employers may elect a lower contribution limit.

PortabilityFull portability requiredPortability allowed at employer’s discretionNone
RolloverFull rollover requiredRollover allowed at employer’s discretion$550 rollover allowed at employer’s discretion
Funds AvailabilityAs deposits are creditedAs deposits are credited; may be credited in a lump sumFull annual election available on first day of coverage (uniform coverage)
Claim AdjudicationNot allowed; though participants must retain receiptsRequiredRequired
Compatibility with Other Savings AccountsMay be paired with HRA/ FSA if limited to amounts over deductible, or to dental/ vision only; may be paired with DCAP, PRAMay be paired with FSA, DCAP, PRA. IF paired with an HSA, must be limited to amounts over the deductible or to dental/vision onlyMay be paired with HRA, DCAP, PRA. If paired with an HSA, must be limited to amounts over the deductible or to dental/vision only
Employer ContributionsCan be made on behalf of current employees (account extends to spouse and dependents)Can be made on behalf of current, former employees, their spouses and dependents, and spouses and dependents of deceased employeesCan be made on behalf of current employees (account extends to spouse and dependents)
ERISA PlanGenerally noYesYes
COBRADoes not applyAppliesApplies
RetireesCan be coveredCan be coveredCannot be covered
Debit Card UsageYesYesYes
Contributions for Medicare ParticipantsContributions cannot be made once an individual has Medicare coverageNo limits on contributionsNo limits on contributions
Usage for Ineligible ExpensesAllowed. Amounts included in income; subject to 20% penalty unless after account beneficiary’s death, disability or attaining age 65Not allowedNot allowed
Distributions for Expenses Incurred After Individual is No Longer EligibleCan be madeCan be made at employer’s discretion, or if COBRA is electedCan be made if COBRA is elected
Coverage for Sole Proprietors, Partners and 2% or More S-corp OwnersYes, but not eligible to participate in cafeteria plan used to fund HSA in the workplaceCannot be coveredCannot be covered

Printer friendly version

HSA for Dummies Cover Thumbnail

HSAs For Dummies

Master key HSA concepts and ask all the right questions.

Get Your Copy

Learn About Tax-Advantaged Employee Benefits

Marketplace

Buy Eligible Items

Find out where you can quickly make eligible purchases with HSAs, FSAs, and other accounts

Learn More

Eligible Expenses

Find Eligible Items

Check out the eligible expenses list to see just how useful health care accounts can be

Find Eligible Items

Calculators

Estimate Growth Potential

Use our plan calculators to see how much contributing to an HSA or FSA could pay off in the long run

View Plan Calculators

Blog

Get Helpful Tips

Our blog, Connections, is the perfect place to find helpful posts on CDH and work-life benefits

Visit the Blog

Resource Library

Continue Learning

Visit the Resource Library to find videos, guides, infographics, and more to help you make the most of your benefits

Find Resources

FAQs

Get Answers

There’s a lot to know about HSAs, FSAs, HRAs, and more, which is why we’ve put together these FAQs

Get Answers

Make the Most of Your FSA

FSA Store

Our Latest Resources

Our Latest Blog Posts

Broker Tech Check: Preparing for the World of Benefits in 2021

By |November 20th, 2020|

With the many changes that happened in 2020, employers’ need for broker assistance with selecting and administering benefit plans has increased–as has the need for technology. We talked with our experts to learn what brokers can do to prepare for 2021 with this broker tech check! Take a look to get ready for next year and check out our latest podcast for more on the topic.

ConnectYourCare has updated our Privacy Policy. You can review the updated language here. By continuing to use this site, you agree to our Privacy Policy and End User Terms of Use Privacy Policy and Terms of Use. Agree