Key Differences in Consumer-Directed Health Care Spending Accounts

Key Differences in Consumer-Directed Health Care Spending Accounts

While all three types of reimbursement or spending accounts associated with consumer-directed health care (CDHC) offer valuable benefits to both employer and employee,

it's important to consider the differences between these plans when deciding which ones to offer as part of your benefits package.

Health Flexible Spending Account (FSA) Health Savings Account(HSA) Health Reimbursement Arrangement (HRA)
Contributions made by Employee and/or employer Employee, other individuals and/or employer Employer only
Account owner Employer Individual Employer
Tax benefits Pretax contributions; tax-free withdrawals for qualified expenses [no provision for non-qualified withdrawals] Pretax contributions; tax-free withdrawals for qualified expenses; tax-deferred earnings Pretax contributions; tax-free withdrawals for qualified expenses
[no provision for non-qualified withdrawals]
Interest earned No Yes No
Contribution limits A $2,500 cap effective 2013; currently employers set the limit Yes, $3,050 individual or $6,150 family (2011) None required today, but contributions are set by employer
Withdrawals for non-medical expenses Not allowed Allowed, but taxed 20% effective 2011 Not allowed
Claim receipts must be submitted Yes No - but employee should keep receipts in case of an IRS audit Yes
Unused balance Money is forfeited Money is carried forward and accumulates Money may be carried forward and accumulates
If employee leaves the company Money is forfeited Money stays with the employee Money is returned to the employer

 

The Vantage Benefits Card can be used with any of the above consumer-directed health care plans, and can accommodate plan stacking rules to access several CDHC accounts from one card.


Call 800-337-8005 to learn more about how Vantage's benefit solutions can help your business.