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  Health Savings Account (HSA) Flexible Spending Account (FSA) Health Reimbursement Account (HRA)
Description An Interest-bearing, Tax-advantaged account designed to cover basic medical expenses in conjunction with a High Deductible Health Plan.
 		 An account to reimburse with pre-tax dollars for eligible medical, dental, vision or hearing expenses.
 		 An employer-sponsored plan designed to reimburse an employee and his or her spouse and/or dependents for eligible medical care expenses
 
Who Can Contribute to the Account? Employer and eligible employees (unless the employee is claimed as a dependant on another person’s tax return) Employee contributions may be pre-tax or tax deductible.
 		 Employers and the employee (employee contributions are made pre-tax).
 		 Employer (former employees can make after-tax COBRA contributions).
 
Are Pre-Tax Contributions via a Cafeteria Plan Permissible?
 		 Yes Yes No
Age Limit
 		 Yes, contributions are not allowed by or for those enrolled in Medicare.
 		 None None
Limits on Contribution Amounts?
 		 · Subject to dollar limits. ($2,900 Single / $5,800 Family in 2008)

· For those ages 55 or over, the limit is increased to $900 in 2008.

· Spouses have a single limit if either has family coverage.
 		 None, except nondiscrimination requirements and limits designed to protect employers from uniform availability rule applications (most plans have annual limits). None, except nondiscrimination requirements.
Are There Restrictions on Plan Design?
 		 Yes, employees must have a High Deductible Health Plan with:

· Min. annual deductibles of $1,100 single coverage/$2,200 family coverage.

· Max. OOP: $5,600 single coverage/$11,200 family coverage (higher OOP can apply to out-of-network expenses).
 		 No No
Allows Coverage Under Another Health Plan?
 		 No, except dental, vision, accident, disability, long-term care, worker’s compensation, liability, property damage, specified disease or illness, fixed indemnity hospitalization.
 		 Yes Yes
Consequences of Excess Contributions
 		 6% excise tax.
 		 N/A N/A
Reimbursable Medical Expenses
 		 All §125 medical expenses (including non-prescription drugs) and long-term care expenses but not health insurance premiums (subject to exceptions).
 		 All §125 medical expenses (including non-prescription drugs) except long-term care expenses and insurance premiums.
 		 All §125 medical expenses (including non-prescription drugs and insurance premiums) except long-term care expenses.
 
Are Premiums for Medical Coverage Reimbursable?
 		 Yes, COBRA and qualified long-term care coverage, health plan coverage while receiving unemployment compensations, health plan coverage (other than Medicare supplemental insurance) for those age 65 or older.
 		 No Yes, for any health plan.
 
Is Long Term Care Reimbursable?
 		 Yes, LTC expenses and LTC coverage can be reimbursed.
 		 No, neither LTC expenses nor coverage.
 		 Yes, LTC expenses excluded, but LTC coverage can be reimbursed.
 
Is Carryover Allowed?
 		 Yes Yes-75 day grace period only
 		 Yes if employer allows
 
Is it Portable?
 		 Yes No No, but can be designed to allow use following termination or while covered by another employer’s plan.
 
Is Pre-Funding Required?
 		 Yes-Funds are only available as contributions are made to the account.
 		 No-Funds are available on first day of plan year.
 		 No-Usually available on first day of plan year.
 
Participant Contributions and Tax Implications
 		 After-tax participant contributions are tax-deductible and pre-tax participant contributions and are treated as employer contributions.
 		 After-tax participant contributions limited to COBRA and are not deductible on the participant’s tax return, and pre-tax participant contributions are treated as employer contributions.
 		 After-tax participant contributions limited to COBRA and are not deductible on the participant’s tax return, and pre-tax participant contributions are treated as employer contributions.
 
Earnings Excluded from the employee’s income.
 		 Plans usually are unfunded and accounts have no earnings, but any earnings would be excluded from the employee’s income.
 		 Plans usually are unfunded and accounts have no earnings, but any earnings would be excluded from the employee’s earnings.
 
Distributions for Medical Expenses
 		 Excluded from the employees’ income.
 		 Excluded from the employee’s income.
 		 Excluded from the employee’s income.
 
Distributions for Non-qualified Medical Expenses
 		 Subject to income tax and a 10% penalty (distributions after death, disability, or reaching age 65 are exempt from the 10% penalty).
 		 Not allowed.
 		 Not allowed.
 
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