Side By Side Plan Comparison
Type of account	HSA* Health Savings Account	HRA Health Reimbursement Arrangement	FSA Flexible Spending Account
Initial legislation or regulation	Health Insurance Portability and Accountability Act of 1996	U.S. Department of the Treasury Revenue Ruling 2002-41	Revenue Act of 1978
Date effective	January 1, 1997	June 26, 2002	January 1, 1979
Eligibility	Self-employed or an employee of a small business (50 or fewer employees) Must be covered by high-deductible health plan	All employees	All employees except self-employed
Internal Revenue Code reference	Internal Revenue Code section 106(b)	Internal Revenue Code section 105-106	Internal Revenue Code section 125
Who can use the account?	Individuals & any size group**	Any size group**	Any size group**
Who may fund the account?	Employer or employee, can be both in the same year** Employee can contribute pre-tax dollar through Section 125 Plan	Employer	Employer/employee** Typically the employee contributes pre-tax dollars through a Section 125 Plan
What plans may be offered with the tax-advantaged account?	An HDHP as follows***: Min. deductible $1,150|$2,300 F OPM $5,800| $11,600 F	Any or no health plan	Any or no health plan
Is there a limit on the amount that can be contributed per year?	$3,000|$5,950 F*** Catch-up contributions: $1,000/yr - Age 55 by end of tax year	Determined by employer; there is no IRS prescribed limit	Employer sets maximum medical reimbursement cap; there is no IRS prescribed limit Dependent care at $5,000 by IRS
Must claims submitted for reimbursement be substantiated?	No	Yes	Yes
What expenses are eligible for reimbursement?	Section 213(d) Medical Expenses -COBRA premiums -QLTC premiums -Health premiums while receiving unemployment benefits -Health premiums except medical supplement policies, if medicare eligible due to age	Section 213(d) Medical Expenses Health premiums for current employees, retirees, and qualified beneficiaries, and QLTC premiums Employer can define "eligible medical expenses"	Section 213(d) Medical Expenses Expenses for insurance premiums are not reimbursable Employer can define "eligible medical expenses"
Type of account	HSA*	HRA	FSA
Is it portable?	Yes	No	No
May account reimburse non-medical expenses?	Yes, however taxed as income & 10% penalty (no penalty if distributed after death, disability, or eligible for medicare)	No	No
Employer tax deductible?	Deductible	Reimbursements are deductible	Employer FSA contribution are deductible business expenses
Employee tax deductible?	Pre-tax in a cafeteria plan or tax deductible (not necessary to itemize)	Employer dollars only; reimbursements are not wages	Tax free employee contribution & reimbursement
Can unused funds be rolled over from year to year?	Yes	Yes, subject to COBRA	No, in some cases employee may elect COBRA through end of plan year
Section 125 FSA	Only premium & dependent care, no medical reimbursement accounts	No restrictions	N/A
Is interest earned on the tax-advantaged account?	Yes, accrues tax-free	Yes, paid to the employer	No
Does the uniform coverage rule apply?	No	No	Yes
Non-qualified withdrawals?	Taxable plus 10% penalty to age 65	Qualified expenses only, employer determines post 65 payment	Each claim is adjudicated to meet IRS Section 213
Effective date	Calendar Year	Plan Year	Plan Year

*HSA Information Subject to Change Pending Developing DOL Regulations
**Self-Employed Individuals, Including Partners, and More Than 2% Shareholders In A Subchapter S-corporation cannot contribute.
***For Calendar Year 2009

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This material is not intended to offer legal, accounting or tax advice.