See a comparison of Health Savings Accounts (HSA’s),
Flexible Spending Accounts (FSA’s) & Health Reimbursement Arrangements
(HRA’s) Side-By-Side.
|
HSA |
FSA |
HRA |
| Who "owns" it? |
Individual/Employee |
Individual/Employee |
Employer |
| Who funds it? |
Employer or Employee or both or (non-employed) Individual |
Typically funded by employee. |
Employer only |
| How is it funded? |
Money is deposited directly into the account. |
A set amount of pretax wages designated by the employee is deposited directly
into an account. |
Employer funds are used to reimburse employees when presented with a valid expense.
|
| Is it a personal account? |
Yes, employee has control. |
Yes, employee has control. |
No, employer has control. |
|
What type of corresponding health plan is allowed? |
Only insurance department approved high deductible plans. |
Any type of health plan arrangement. |
Any high deductible type of health plan arrangement. |
| Does interest accrue? |
Interest can be accrued tax free in HSA's. |
Interest does not accrue. |
Interest not accrued or addressed in IRS regulations. |
| Is it portable? |
Rollover is allowed - individual owns HSA, takes it when leaving employment. |
Unused funds must be spent by plan year's
end otherwise individual loses money. |
HRA's cannot be rolled over to a new employer. An employer is under no obligation to continue the arrangement
after employee departure, however an employer may chose to continue
reimbursing a former employee's expenses from the HRA. |
| Can funds be used for non-medical expenses? |
Funds used for nonmedical expenses are taxed as income and incur a 10% penalty.
After age 65 there is no penalty. |
No, the health portion of an FSA can only be used for expenses defined under
213(d) of IRC. |
No, only expenses defined under 213(d) of IRC. |
| What is the tax treatment? |
Qualified HSA's are tax-free as long as funds are spent on medical care defined under 213(d).
|
Contributions to an FSA are tax-free and so reduce annual taxable income. |
Reimbursements to employees are tax-free as long as they are used on qualified
health care purchases. |
For more information on these products and services, please
contact Stephan Chapman or Kent Evans at (302) 658-8000 or (800) 441-9385.
Investments Offered Through Representatives
of Jefferson Pilot Securities Corporation; Member NASD/SIPC
One Granite Place, Concord, NH 03301 (603) 226-5000
RTA Financial Services, Inc. and Jefferson Pilot Securities Corporation
are not affiliated.
