FSA/HRA/HSA ADMINISTRATIONFlexible Spending Accounts (FSA)A Flexible Spending Account (FSA), AKA a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer. An FSA allows an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses but often for dependent care or other expenses. Money deducted from an employee's pay into an FSA is not subject to payroll taxes, resulting in substantial payroll tax savings. One significant disadvantage to using an FSA is that funds not used by the end of the plan year are lost to the employee.
With an FSA, Businesses Receive
Health Reimbursement Account (HRA)A Health Reimbursement Account (HRA) is a federally authorized tax-favored funding program that creates a long-term solution for employers to save money on health care costs. Employers use the savings from lower premiums to reimburse employees for part of their health care expenses, typically a portion of their deductible.
With an HSA, Business Can
Health Saving Account (HSA)High-deductible health plans typically offer lower monthly premiums than traditional health plans. With an HSA-qualified HDHP, you can take the money you save on premiums and invest it in the HSA. While you are responsible for your initial health care costs until the deductible is met, the advantage is that the money saved on premiums is ready and waiting to pay for qualified medical expenses. In addition, HDHPs generally provide coverage for preventive care services, such as routine doctor's visits and annual physicals.
Beyond the lower premiums afforded by an HSA-qualified HDHP, an HSA account offers several benefits. |
