|
|
Health
Savings
Account
(HSA) |
Health Reimbursement Account
(HRA) |
Flexible
Spending
Account
(FSA) |
|
ESTABLISHMENT OF ACCOUNT |
• Eligible Individual
• Employer
• Integrate with Employer-Sponsored Cafeteria Plan |
Employer-Sponsored Benefit Program |
Employer-sponsored Benefit Program via Cafeteria Plan |
|
ACCOUNT TYPE |
Trust or Custodial Account |
• General Assets of Employer
• Trust |
• General Assets of Employer
• Trust |
|
CONTROL AND OWNERSHIP OF ACCOUNT |
Employee |
Employer |
Employer |
|
ACCOUNT PORTABILITY |
Yes |
No |
No |
|
HIGH DEDUCTIBLE HEALTH PLAN (HDHP) REQUIRED |
Yes |
No |
No |
|
ELIGIBILITY |
• Eligible Individual Covered by HDHP
• Eligible Employee covered by HDHP |
Employee Who Meets Employer's Eligibility Criteria |
Employee Who Meets Employer's Eligibility Criteria |
|
FUNDING |
• Individual
• Employee salary reduction dollars
• Employer
• Third party |
Strictly by Employer |
• Employee Salary Reduction Dollars
• Employer |
|
ACCOUNT LIMITS |
Individual
Lesser of
Deductible Amount ($1,050+) or $2,700 (for 2006)
Family
Lesser of
Deductible Amount ($2,100+) or $5,450 (for 2006)
|
No statutory required limit |
No statutory required limit |
|
ANNUAL OUT OF POCKET LIMITS |
• $5,250 Individual
• $10,500 Family |
n/a |
n/a |
|
REQUIRED PRE-FUNDING |
Yes |
No |
No |
|
DISBURSEMENT OF MONEY |
Checks, debit card |
Reimburse through Employer |
Checks, Debits, Withdrawal Slips |
|
QUALIFIED MEDICAL EXPENSES |
• Qualified medical expenses as defined in IRC §213(d), including over-the-counter drugs
• Retiree health insurance premium other than Medicare supplement policies
• COBRA premium
• Long term care (LTC) insurance premium
• Health insurance premium if receiving unemployment
Not permitted:
• Any other type of health insurance premium |
• Qualified medical expenses as defined in IRC §213(d), including over-the-counter drugs
• Health insurance premium, including LTC premium |
• Qualified Medical Expenses as defined in IRC §213(d), including over-the-counter drugs
Not permitted:
• Health insurance premium, including LTC insurance premium |
|
TAX TREATMENT OF CONTRIBUTIONS |
• Individual's contributions to own HSA tax-deductible
• Employee-Contributions to Employee's own HSA are Tax-Deductible
• Employer-Contributions to Employee's HSA (with or without cafeteria plan) with salary reduction dollars:
- Deductible by Employer
- Excludable
from
Employee's
gross income |
• Only Employer Contributions permitted:
- Deductible
by Employer
- Excludable
from Employee's gross income
|
• Only Employer Contributions permitted:
- Deductible
by Employer
- Excludable
from Employee's gross income |
|
TAXATION OF INTEREST OR DIVIDEND ACCUMULATION |
Tax-free |
n/a |
n/a |
|
CONSEQUENCES OF CASHING-OUT ACCOUNT FOR NON-QUALIFIED MEDICAL EXPENSES |
Distributions are taxed as income and subject to 10% penalty tax, except following:
- Death
- Disability
- Attainment of Medicare eligibility age
|
No cash-out option available |
Some (Section 125 Rules apply) |
|
CARRY-OVER OF FUNDS PERMITTED |
Yes |
Yes
(Employer decides) |
No |
|
DEATH OF ACCOUNT HOLDER |
Surviving spouse only (if designated beneficiary) entitled to use remaining account monies for qualified medical expenses |
Eligible Dependents entitled to use remaining account monies for qualified medical expenses, in accordance with the plan document |
Eligible Dependents entitled to use remaining account monies for qualified medical expenses, in accordance with the plan document |
|
APPLICABILITY OF ERISA |
No |
Yes |
Yes |
|
SUBJECT TO COBRA |
- No, if not Employer-based
- Unclear, if Employer-based
|
Yes |
Yes |
|
EFFECTIVE DATE |
1/1/2004 |
6/26/2002 |
3/7/1989 |
