Flexible Spending Accounts are benefit plan arrangements that allow employees to pay for certain medical or dependent care expenses and transportation expenses on a pre-tax basis. These plans provide both employers and employees with significant financial benefits.
While many employers offer a Flexible Spending Arrangement (FSA) option, companies have been offering more and more additional options, including HSAs and HRAs. These additional options are designed to involve workers more directly in their own medical care. A HSA (Health Savings Account) is a tax-exempt account created exclusively to pay for the qualified medical expenses of the account holder and his or her dependents. To qualify for an HSA, individuals must have a High Deductible Health Insurance, meaning a plan that requires a certain amount of money up front before coverage kicks in. A HRA (Health Reimbursement Arrangement) is an employer funded account that reimburses employees for qualified medical expenses, deductibles and co-insurance amounts.
Download our Comparison Chart to learn more about the benefits of HSA, HRA, and FSA accounts. To view our detailed PowerPoint Presentation explaining the differences between HSA, HRA, and FSA accounts, click here.