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Funding Accounts

Understanding Funding Accounts

Do names like FSA, HSA, and HRA confuse you? It can be difficult to understand the differences between these options, whether you’re the employer providing them or the employee using them.

Use the resources below to learn about each type of funding account and how each can be used to help reduce the costs of your medical expenses.

Health Reimbursement
Arrangement (HRA)

Health Savings Account 
(HSA)

Flexible Spending Account 
(FSA)

Account Holder

Employer

Individual (Employee)

Employer

Eligibility

Individual must work for an employer that offers one

Individual must be enrolled in an HSA-qualified medical plan

Individual must work for an employer that offers one

Funding

Employer only

Individual and/or employer and certain others

Individual and/or employer

Portability

Cannot be rolled over to a new employer

The employee takes it when leaving employment; after age 65, funds may be used for non-medical expenses

Cannot be rolled over to a new employer

Fund Carryover from Year to Year

Optional (determined by employer)

Funds carry over year to year

Health FSA: Optional (employers choose a 77-day grace period, a $500 carryover, or neither)

Dependent Care FSA: Funds are forfeited to employer if they are not used by the end of the plan year after a run-out period or grace period, if applicable

CDPHP Plan Compatibility

EPO, PPO, or HMO with a deductible, or any HDEPO, HDPPO, HDHMO

Qualified HDEPO, HDPPO, HDHMO

Any

Qualified Expenses

Determined by employer; can include copayments, deductibles, vision care, dental care, prescriptions, and other IRS-qualified medical expenses

All IRS-qualified medical expenses

Health FSA: All IRS-qualified medical expenses, or defined, limited expenses such as dental and vision care

Dependent Care FSA: Child or adult day care