Comparison Chart - FSA vs. HRA vs. HSA

The following is a comparison chart, which reflects the criteria and tax benefits for HSA, FSA and HRA:

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HSA FSA HRA Who qualifies as a participant? All All except self-employed All except self-employed Who “owns” it? Employee Employee Employer Summary Plan Description required? Yes Yes Yes Who funds it? Employer, Employee or both Typically Employee, but can be both Employer How is it funded? $ is deposited directly into the account A specified amount of pretax wages designated by employee is deposited directly into an account Employer reimburses employee when presented with a valid receipt Does interest accrue? Interest can be accrued tax free Interest not accrued Interest not accrued nor addressed in IRS regulation Employee tax savings? Contributions are tax-free Contributions are tax-free Claim reimbursements are tax-free Employer tax savings? Business expense plus 7.65% of employee contribution Business expense plus 7.65% of employee contribution Business expense deduction for payments Account pre-funded by employer required? No Yes No Roll unused dollars to next year? Yes No Yes Reimburse uncovered medical expenses? Yes Yes Yes Claims substantiation? Only upon audit Yes Yes Insurance premiums paid from account? Yes No Yes Pay for long term care premiums? Yes No Yes Banking type? IRA type account Employer assets Employer assets Convert account to taxable income? Yes No No Account retained by employee upon termination? Yes No No; however, terminated employees may be covered