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HSAs, HRAs, and FSAs

Savings accounts can help you save

HSAs, HRAs, and FSAs are types of accounts you can use to pay for certain health care expenses for you and your covered dependents.

What are HSAs, HRAs, and FSAs?

A health savings account (HSA) is a bank account you own to pay for eligible health care expenses or you can use it to save toward retirement. An HSA is offered with a qualified high-deductible health plan (HDHP) which typically has lower premiums/plan contributions and higher deductibles than a traditional health plan. If you have a health plan through your employer, the account is opened through the HSA provider chosen by your employer. You, your employer and others can put money into your HSA up to a certain yearly limit set by the IRS guidelines.

A health reimbursement account (HRA) is a fund of money in an account that your employer owns and contributes to. HRAs are only available to employees who receive health care coverage from an employer.

A flexible spending account (FSA) is a spending account for different kinds of eligible expenses. There are three kinds of FSAs that may be available if you choose your own individual and family plan, or one through your employer:

  • Health care FSAs are for eligible medical expenses not covered by your health plan
  • Dependent care FSAs cover eligible dependent care services for dependents (age 12 and under or disabled of any age)
  • Limited purpose FSAs cover eligible dental and vision expenses if you are enrolled in a high-deductible health plan and have an HSA.

See a list of all eligible expenses

How do HSAs, HRAs, and FSAs Differ?

  HRA HSA1 Health Care FSA Dependent Care FSA Limited Purpose FSA
What is it? An account set up and funded by your employer to help pay for eligible health care expenses. A savings account (compatible with a high deductible health plan) that you own to help pay for qualified health care expenses. An account you can use to pay for eligible health care expenses for you and your covered dependents. An account you can use to pay for eligible dependent care services for your covered dependents age 12 and under, or disabled dependents of any age who are unable to care for themselves. An account that can reimburse you for eligible dental and vision expenses when you are enrolled in an HSA plan
Who's eligible? Anyone who is part of a health plan set up by their employer and including an HRA offering.2 Anyone enrolled in a qualified high-deductible health plan (HDHP)3 Anyone with a plan that includes FSAs. Anyone with dependents age 12 and under or disabled of any age. Anyone with a high-deductible plan, even if you are already enrolled in an HSA
Who owns the account? The employer who set up the plan. You You You You
Who can contribute? Your employer You, your employer, family and others. You, your employer, family and others. You, your employer, family and others. You, your employer, family and others.
Limit to the dollar amount that can be put in? Depends on your employer's rules. Yes. There is an IRS limit on how much you can put into it each year. Yes. There is an IRS limit on how much you can put into it each year. Yes. There is an IRS limit on how much you can put into it each year. Yes. There is an IRS limit on how much you can put into it each year.
Will the balance carry over into the next plan year? Your employer may not allow or may limit the amount that can carry over. Yes. The money will stay in your account until you choose to spend it. You can save and use it into retirement. You may be able to carry over up to $500 into the next plan year, depending on your plan. No. At the end of the plan year, you lose any dollars left in your Dependent Care FSA. You may be able to carry over up to $500 into the next plan year, depending on your plan.
Can I take the account with me? Is it portable? No Yes No No No
Can the money in the account earn interest? No Yes No No No
Can I use the money for things other than qualified or eligible health care expenses? No Yes, when you reach age 65. When you withdraw the money, it is subject to income tax only. If you are under age 65, the money is subject to income tax and may also be subject to a penalty tax. No No No
Can I use the money to pay for COBRA or other plan premiums? Yes, if allowed by your employer. Yes, as allowed by IRS guidelines. No No No

HSA, HRA, and FSA Frequently Asked Questions

This is provided for informational purposes only and is not intended to replace the advice of a qualified accountant or tax professional. Consult your personal tax advisor for assistance.

How do you use the money in the account?

Some HSAs, HRAs, and FSAs include a debit card so you can easily pay from your account at the time of service. Otherwise, you can reimburse yourself from an FSA4 or provide the receipt to your employer with an HSA.

What are the benefits?

All accounts are tax-advantaged,5 which means any contributions are untaxed.6 However, HSA withdrawals will be taxed if you use the money for anything other than qualified medical expenses.

What expenses are eligible for FSAs?

You can use your HRA, HSA or health care FSA to reimburse yourself for medical and dental expenses that qualify as federal income tax deductions (whether or not they exceed the IRS minimum applied to these deductions) under Section 213(d) of the tax code.

View the complete list of services

1Plans vary, but this is how an HSA generally works. You cannot open an HSA if, in addition to coverage under an HSA-qualified High Deductible Health Plan ("HDHP"), you are also covered under a Health Flexible Spending Account (FSA) or an HRA or any other health coverage that is not a HDHP. Prior to enrollment with an HSA provider, you must certify that you have enrolled or plan to enroll under a HDHP and are not covered under any other health coverage that is not a HDHP. Please refer to your plan documents, including specific information on your HSA, or contact your employer for more information on what’s covered and not covered by the plan. The HSA provider and/or trustee/custodian is solely responsible for all HSA services, transactions and activities. Cigna and your employer are not responsible for any aspects of the HSA services, administration or operation

2You may not enroll under this option if you are considered self-employed (including partners and more-than-2% shareholders in a subchapter S corporation). Please refer to your plan documents, including specific information on your HRA, or contact your employer for more information

3A High Deductible Health Plan (HDHP) is a health plan which typically has lower premiums/plan contributions and higher deductibles than a traditional health plan. You cannot open an HSA if, in addition to coverage under an HSA-qualified HDHP, you are also covered under a Health Flexible Spending Account (FSA) or an HRA or any other health coverage that is not a HDHP. Prior to enrollment with an HSA provider, you must certify that you have enrolled or plan to enroll under a HDHP and are not covered under any other health coverage that is not a HDHP. The HSA provider and/or trustee/custodian is solely responsible for all HSA services, transactions and activities. Cigna and your employer are not responsible for any aspects of the HSA services, administration or operation.

4To be eligible for reimbursement you must be working, looking for work or going to school. If you have a spouse or partner, they must also be working, looking for work or going to school.

5HSA contributions and earnings are not subject to federal taxes and not subject to state taxes in most states. A few states do not allow pretax treatment of contributions or earnings.

6Some cities and municipalities may impose income taxes on FSAs. For detailed information please contact your local department of taxation.