Employee Spending Accounts

Health Savings Account (HSA) 

A HSA is a tax-advantaged savings account available to those enrolled into a high-deductible health plan (HDHP). It can be tapped into for qualified medical expenses as well as for other costs like dental and vision care. HSA funds roll over and accumulate year to year if they are not spent. Commonly an HSA & HDHP combo may be offered to provide an effective cost control for an employer’s health insurance.

Flexible Spending Account (FSA)

A FSA is a tax-advantaged savings account available to employees. While it is commonly used to help pay for qualified medical expenses, the list of eligible expenses is relatively robust and FSA funds can be used for what many would consider routine expenses.

Health Reimbursement Arrangement (HRA)

An HRA is an employer-funded arrangement in which participants are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. Commonly an HRA may be used to reduce out-of-pocket expenses for employees before they reach their deductible, effectively bridging the gap, a viable strategy for an employer looking to reduce costs by offering mid to high deductible health plans.