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HRA's

Health Savings Accounts ("HSAs"), which are part of the "Medicare Prescription Drug, Improvement and Modernization Act of 2003," became available for use by eligible individuals on January 1, 2004 . The chart below illustrates how HSAs compare to Health Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs), two arrangements with favorable tax features which are similar in purpose to HSAs.

National Association of Health Underwriters

Comparison of Medical Savings Accounts (MSAs), Flexible Savings Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and

Proposed Provisions for Health Savings Accounts (HSAs) and Health Savings Security Accounts (HSSAs)

 

MSA

HSA

(Proposed)

HSSA

(Proposed)

FSA

HRA

Funding

Employer or employee fund the account (not both) or self-employed individuals.

Individual and/or employer.

Individual, employer, and/or family members (family member funds with after tax contribution).

Normally funded by an employee.

Employer only (self-employed individuals are precluded).

Allowable Health Plans

High deductible plans are allowed in conjunction with an MSA.

High-deductible plans between $1,000 to $2,250 with out-of-pocket maximum of $3,000 for individuals. High-deductible plans between $2,000 to $4,500 with out-of-pocket maximum of $5, 500 for families.

Individuals would be eligible with or without current health plan coverage. For individuals with coverage, the minimum allowable deductible would be $500 for an individual and $1,000 for a family.

Any or no health plan arrangement is permitted in conjunction with an FSA.

Any or no health plan arrangement is permitted in conjunction with an HRA.

Ownership

Individual or employee of a small employer and the self-employed.

Individual/

Employee

Individual/

employee

Employer

Employer

Interest

Interest can be accrued tax free in qualified MSAs.

Interest can be accrued tax free in qualified HSAs.

Interest can be accrued in qualified HSSAs.

Interest can be accrued to the benefit of the employer .

Interest can be accrued to the benefit of the employer.

PLEASE NOTE: The information presented in this analysis is the exclusive property of the National Association of Health Underwriters (NAHU). It was prepared as an informational resource for NAHU members, state and federal policymakers and other interested parties. It is not to be duplicated, copied, or taken out of context. Any omission or the inclusion of incorrect data is unintentional. If you have any questions about the information presented in this document, please contact John Greene, NAHU Director of Federal Affairs at jgreene@nahu.org or (703) 276-3807. 92003

 
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