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May 16, 2023
Benefits 101: Comparing HSAs, HRAs and FSAs
Smart benefits choices are all about saving money and staying healthy, but selecting the right employee benefits can be a challenge. To help, this infographic compares three of the most popular health care savings options: health savings accounts (HSAs), health reimbursement arrangements (HRAs) and flexible spending accounts (FSAs).
| HSA | HRA | FSA | |
|---|---|---|---|
| Who owns the account? | Employee | Employee | Employee |
| Who may fund the account? | Anyone can make contributions to an individual's HSA, including employer and employee contributions | Employer | Employer and/or employee |
| What plans must be offered with the account? | A high deductible health plan (HDHP) that satisfies minimum annual deductible and maximum annual out-of-pocket expense requirements. | An employer must offer a health plan, and the HRA must be considered integrated with group health plan coverage. | Most health FSAs must qualify as excepted benefits to satisfy ACA reforms. To qualify as an excepted benefit, the FSA must meet a maximum benefit requirement and other group health plan coverage must be offered by the employer. |
| Is there an annual contribution limit? | $3,850 Individual $7,750 Family (2023) $3,650 Individual $7,300 Family (2022) Catch-up contributions for those age 55 by the end of the tax year: $1,000/year | No, there is no IRS-prescribed limit. | For plan years beginning in 2023, employees may not elect to contribute more than $3,050 ($2,850 for plan years beginning in 2022) |
| Can unused funds be rolled over from year to year? | Yes | Yes | No, with two exceptions: A health FSA may include a grace period of 2.5 months after the end of the plan year, or it may allow employees to carry over up to $500 (as adjusted for inflation) in unsued funds into the next plan year. |
| What expenses are eligible for reimbursement? | Section 213(d) medical expenses, including: *COBRA premiums *QLTC premiums *Health premiums while receiving unemployment benefits *If Medicare-eligible due to age, health insurance premiums, except for medical supplement policies | Sections 213(d) medical expenses. Cannot reimburse health insurance premiums for individual coverage. Employer can define "eligible medical coverage" | Sections 213(d) medical expenses. Expenses for insurance premiums are not reimbursable. Employer can define "eligible medical expenses." |
| Must claims be substantiated? | No | Yes | Yes |
| May the account reimburse nonmedical expenses? | Yes, but taxed as income and 20% penalty (no penalty if distributed after death, disability or age 65) | No | No |
| Does the uniform coverage rule apply? | No | No | Yes |
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