3 Top FAQs About HSAs, FSAs, & HRAs

3 Top FAQs About HSAs, FSAs, & HRAs

3 Top FAQs About HSAs, FSAs, & HRAs

With all of these acronyms, there’s bound to be some questions you have about their meaning and their actual function.

HSAs (Health Savings Accounts), FSAs (Flexible Spending Accounts), and HRAs (Health Reimbursements) are all accounts that are used to pay for health care expenses. The common thread that binds these together is that they provide employees a means to control a portion of their health care dollars. If they’re going towards the same thing, then why are there so many acronyms? We’ll get to that! Here are three top FAQs about HSAs, FSAs, & HRAs that you may have.

  1. What are health saving accounts?

Whereas FSAs and HRAs are legally owned by the employer, HSAs can be purchased through an individual. HSAs usually require the coverage to be under a high deductible plan—meaning the amount you pay before your insurance kicks in is high.

  1. What are FSAs?

Flexible spending accounts are popular among both employers and employees because it allows employees to defer a portion of their income to pay for medical expenses on a tax-free basis. Legally, the employer owns this account and responsible for its management; including paying claims as they occur. Money left over at the end of the year rolls over reverts to the employer, not the employee. The rollover has a $500 cap and cannot reach the limit of $2,550.

  1. HRAs?

Health reimbursement accounts are kind of like FSAs, except the rules are more flexible designs. For example, employees could reap the benefits of the rollover and let it grow year after year. There are no limits on the amount an employer can contribute to this account.

Are you offering your employees any of these health plans to show them they’re part of the family? To find out if you should be, contact Employee Benefit Plans Inc. in Greenwood Village, Colorado.