Comparison charts provide an excellent way of summarizing complex information. For those interested in defined contribution health strategies, you may be interested in comparing various benefits vehicles.
This comparison chart examines the health reimbursement arrangement (HRA), health savings account (HSA), and flexible spending account (FSA).
It's a good summary of the key differences between the four primary types of health care reimbursement accounts and arrangements.
What do HRA, HSA, and FSA Stand for?
HRA = Health Reimbursement Arrangement. For the purposes of this blog, we will be examining the qualified small employer health reimbursement arrangement (QSEHRA)
HSA = Health Savings Account
FSA = Flexible Spending Account
HRA, HSA, and FSA Feature Comparison Chart
|Who may Contribute||Employer Only||Employer or Employee||Employee or Employer|
|Cost of Employer Contributions||Only pay for Utilization (typically 25-50%)||100% paid regardless of Utilization||n/a|
|Average Cost to Cover $2,000/year Deductible||$500–1,000||$2,000||$2,000|
|Maximum Annual Contribution||$5,150 (single), $10,450 (family) for 2019||$3,500 (single), $7,000 (family) for 2019||Determined by Employer; Capped at $2,600, including employee contributions, in 2017|
|Eligibility Requirements||Must have minimum essential coverage to receive reimbursements tax-free||Must have HSA-qualified health coverage||None or Determined by Employer|
|Each Employee must open new Bank Account?||No||Yes||No|
|Medical Expenses Allowed||Health Insurance Premiums + IRC 213(d)||IRC 213(d) Expenses w/ No Employer Limitations||IRC 213(d) Expenses; but no Personal Health Insurance|
|Use for Non-Medical Expenses||None||None||None|
|Carryover of unused funds to next year||No||Yes||No|
|Portable after Termination||No||Yes||No|
|Administrator||Employer or TPA||Employee||Employer or TPA|
|Cross-Compatibility||QSEHRA with HSA* or FSA>||Limited-Purpose or Post-Deductible FSA or HRA||With HRA or HSA*|
|Employer Reporting||Employer Views Detailed Utilization Reports||No Tracking Possible||Employer Views Detailed Utilization Reports|
*HSAs are fully compatible only with certain HRA and FSA administration platforms that enable HSA-Compatibility