HSA vs. HRA vs. FSA Comparison

HSA vs. HRA vs. FSA Comparison2021-07-01T12:28:44-04:00

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 Ownership Employee/ Individual Employer (held in employee’s name) Employer (held in employee’s name)
Deposits Made By Employer, employee or both Employer Employer, employee or both
Separate Account Required; IRA-type account Not required; can be paid from employer assets Not required; can be paid from employer assets
Expenses Covered Medical, 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:
2022: $1,400 single; $2,800 family
2021: $1,400 single; $2,800 family

Maximum Out of Pocket:
2022: $7,050 single; $14,100 family
2021: $7,000 single; $14,000 family

 

Generally, must be integrated with group medical plan meeting health care reform requirements None
Contribution Limits  

2022: $3,650 self-only; $7,300 family; Catch-up: $1,000

2021: $3,600 self-only; $7,200 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.

 

Portability Full portability required Portability allowed at employer’s discretion None
Rollover Full rollover required Rollover allowed at employer’s discretion $550 rollover allowed at employer’s discretion
Funds Availability As deposits are credited As deposits are credited; may be credited in a lump sum Full annual election available on first day of coverage (uniform coverage)
Claim Adjudication Not allowed; though participants must retain receipts Required Required
Compatibility with Other Savings Accounts May be paired with HRA/ FSA if limited to amounts over deductible, or to dental/ vision only; may be paired with DCAP, PRA May be paired with FSA, DCAP, PRA. IF paired with an HSA, must be limited to amounts over the deductible or to dental/vision only May 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 Contributions Can 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 employees Can be made on behalf of current employees (account extends to spouse and dependents)
ERISA Plan Generally no Yes Yes
COBRA Does not apply Applies Applies
Retirees Can be covered Can be covered Cannot be covered
Debit Card Usage Yes Yes Yes
Contributions for Medicare Participants Contributions cannot be made once an individual has Medicare coverage No limits on contributions No limits on contributions
Usage for Ineligible Expenses Allowed. Amounts included in income; subject to 20% penalty unless after account beneficiary’s death, disability or attaining age 65 Not allowed Not allowed
Distributions for Expenses Incurred After Individual is No Longer Eligible Can be made Can be made at employer’s discretion, or if COBRA is elected Can be made if COBRA is elected
Coverage for Sole Proprietors, Partners and 2% or More S-corp Owners Yes, but not eligible to participate in cafeteria plan used to fund HSA in the workplace Cannot be covered Cannot be covered

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