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: Maximum Out of Pocket: | Generally, must be integrated with group medical plan meeting health care reform requirements | None |
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. |
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 |
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
Eligible Expenses
Find Eligible Items
Check out the eligible expenses list to see just how useful health care accounts can beCalculators
Estimate Growth Potential
Use our plan calculators to see how much contributing to an HSA or FSA could pay off in the long run
Blog
Get Helpful Tips
Our blog, Connections, is the perfect place to find helpful posts on CDH and work-life benefits
Resource Library
Continue Learning
Visit the Resource Library to find videos, guides, infographics, and more to help you make the most of your benefits
FAQs
Get Answers
There’s a lot to know about HSAs, FSAs, HRAs, and more, which is why we’ve put together these FAQs
Our Latest Resources
Our Latest Blog Posts
Top Three Reasons to Pay Attention to COBRA in 2021
Due to the pandemic, what seemed to be hard and fast rules turned out to be much more flexible. What hasn’t changed is that everyone still needs secure health care access, and COBRA continuation coverage plays into this fact. These are the top three reasons to pay extra attention to COBRA this year.
How a Dependent Care Assistance Program Can Enhance Your Benefits Package
A dependent care assistance program (DCAP) could be a simple solution for employers looking to support employees and offer a more attractive benefits package. A DCAP, more widely known as dependent care flexible spending accounts (dependent care FSA), is a voluntary benefit plan designed to help offset the cost of child or elder care. Learn how adding a dependent care FSA to your benefits plan could give you an edge when it comes to attracting and retaining employees at your organization!
Renew Your 2021 Resolutions: 5 Tips for Maximizing Your HSA Savings
We all start a new year with the best of intentions—exercise more, eat better, get a restful night’s sleep…or maybe even save money. By now, you may already need to renew those resolutions. If you’re looking to make the most of your health savings account (HSA) this year, here are five HSA tips that will help you prioritize your health to wealth strategy and make the rest of your year healthier, calmer, and perhaps even more…predictable!