Is an HSA the same as a Medical Flexible Spending Account (FSA) or Health Reimbursement Account (HRA)?
While an HSA is similar to a Medical FSA and HRA, there are several key differences. For example, an HSA has no ‘use-or-lose’ provision as funds automatically carry over from year to year. The HSA is also portable if employment changes, funds can be invested, and contributions can be made by both the employer and the HSA participant. However, since an HSA provides an attractive tax benefit, the IRS sets the annual contribution limits, limits the types of other plans that can be offered alongside an HSA (e.g. a General Medical FSA or HRA) and requires that the HSA be combined with an HSA-compatible health plan.
While an HSA is similar to a Medical FSA and HRA, there are several key differences. For example, an HSA has no “use-or-lose” provision as funds automatically carry over from year to year. The HSA is also portable if employment changes and funds can be invested. However, since an HSA provides an attractive tax benefit, the IRS sets the annual contribution limits, limits the types of other plans that can be offered alongside an HSA and requires that the HSA be combined with an HSA-compatible health plan.
Related Questions
- Can I roll over my Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA) account balance to an HSA?
- How do the health flexible spending account (FSA) and health reimbursement arrangement (HRA) rollovers to my HSA work?
- Can I keep my health savings account (HSA), flexible spending account (FSA), or health reimbursement account (HRA)?
