How do Health Savings Accounts differ from other tax-advantaged accounts?
HSAs have certain features that are more favorable for participants than Health Reimbursement Arrangements (HRAs) or Flexible Spending Accounts (FSAs). The participant is immediately vested in the account, meaning the money belongs to the participant. The participant can’t lose it if it isn’t spent during a plan year, as is the case with an FSA. The unused balance accumulates over time and earns interest so the participant can save for future expenses. Although HRA funds can accumulate from one year to the next, they cannot transfer to another employer if the employee changes jobs, as is the case with an HSA. Generally, HSA funds can be easily accessed at any time with the HSA debit card. The card can generally be used to withdraw funds from any ATM in the CIRRUS network or used to pay for products and services where MasterCard is accepted. The HSA balance can accumulate quickly, within IRS guidelines, because HSAs have different funding options than other tax-advantaged accounts. The
