What You Need to Know About HSAs, HRAs, and FSAs

• How it works:
  • Enroll in a High Deductible Health Plan (HDHP), which means you pay for your health care before your health insurance plan begins to pay. 
  • Set aside pre-tax dollars in a savings account. 
  • Use the account to pay for medical expenses before you meet your deductible. 
• HSA Benefits:
  • You own the savings account.
  • Portable—the funds are yours if you change plans.
  • Funds build over time.
  • If you don’t use the money, it earns interest. You can use it to pay for future services tax free.
• Best for: Healthy people who want to save for future health care expenses, and those who are self-employed. 

• How a HRA works:
  • Your employer sets up a HRA account for you and makes deposits. 
  • You can use the funds to pay for health care services not covered by your plan, such as copays, deductibles and coinsurance, which is the percentage of the costs you may pay.
• HRA Benefits:
  • Your employer is giving you money to cover your costs.
  • Can be used with any health plan.
  • The payment process when you visit a doctor is simple.
  • If you don’t use all the money, it rolls over to the next year.
• Best for: Employees who don’t plan to switch companies this year. Your employer decides whether you can take the account funds with you when you leave your job.

• How FSA works:
  • Your employer sets up a FSA for you.
  • You (or your employer) contribute to the account and can choose which expenses you’d like to put the money toward, such as prescriptions, copays or deductibles.
• Tip: Since the funds do not carry over to the next year, only set aside the amount of money you plan to spend.
• FSA Benefits:
  • You pay for medical expenses with tax-free dollars.
  • You have control over how much you’d like taken out of your paycheck and put into the account.
• Best for: People who expect to have medical expenses and want to budget for them.

To learn more about the health spending accounts available to you, visit Empireblue.com .