Help your employees save on healthcare costs

When it comes to choosing the right health benefit account for your company, you have options – including Health Savings Accounts (HSA), Flexible Spending Accounts (FSA) and Health Reimbursement Arrangements (HRA). All three accounts provide tax benefits for employees and employers, while helping employees cover qualified medical expenses. Use the chart below to explore distinct features of these accounts, such as who owns them, funds them and qualifies for them.

Feature Comparison Chart
HSA
FSA
HRA
Pre-Tax Deductions
Employees or individuals make contributions to an HSA and FSA on a pre-tax basis. This helps lower payroll and income taxes, and allows contributed funds to remain untaxed. Employers make pre-tax contributions to an HRA, and employees will not pay taxes when using the funds for eligible purchases.
Interest-Bearing
HSA contributions may yield an interest rate – making an HSA a valuable savings account similar to an IRA or 401(k).
Portable
An HSA is fully portable. This means, an employee can take their account with them if they leave the company or retire.
Individual-Owned
HSA and FSA contributions are the individual’s to keep. They can be withdrawn at any time without penalty for qualified purchases.
Employer-Owned
Contributions to an HRA are owned by the employer and cannot be transferred outside of the company.
Employer Contributions
Only employers can contribute funds to an HRA. And they may choose to contribute funds to their employees’ HSA or FSA. These funds are deposited directly into the employee accounts.
Employee/Individual Contributions
Employees or individual owners contribute funds to their HSA or FSA. These funds are deposited directly into their account.
Associated with HDHPs1
HSAs and HRAs are almost always used in conjunction with a lower-cost High Deductible Health Plan (HDHP).
Annual Contribution Rollover2
If an individual has not used all the funds in their HSA or HRA by the end of the year, they do not lose that money. It will accumulate year after year.
Loss of Unused Funds2
If an individual has not used all the funds in their FSA by the end of the year, they lose that money.
Annual Contribution Limits
Current law places a federal cap on annual HSA and FSA contributions. Tax benefits do not apply to contributions above this cap.

1If a limited-purpose FSA is selected, it can be used with a HDHP.

2Employers may choose to provide an FSA with a carryover option that lets employees roll over up to $500 of unused funds.

Check with your tax or benefits adviser to determine which account may be best for your company and your employees.

Enhance your health benefit program with Visa Healthcare & Benefit cards

There’s an easy way to make your HSA, FSA or HRA even more appealing to current and prospective employees. Simply add a Visa® card. Your company can reduce administration time and costs, while your employees enjoy benefits like these:

  • Convenient access to funds – employees can tap into their account when they need it, wherever Visa Debit Cards are accepted
  • No more paper claims – there’s no need to submit claims and wait for reimbursement

By giving employees an easier way to access their health benefit accounts, you can increase satisfaction and employee participation in your program.

Find a Visa Healthcare & Benefit card provider

Health Savings Account (HSA)

Health Savings Account (HSA)

An HSA helps individuals with qualifying high-deductible health plans (HDHPs) pay for current and future medical expenses. Employees can arrange contributions on their own or through their employer. Explore the unique features of an HSA. Learn more

An HSA helps individuals with qualifying high-deductible health plans (HDHPs) pay for current and future medical expenses. Employees can arrange contributions on their own or through their employer. Explore the unique features of an HSA. Hide

Benefits for employees

Benefits for employees

Tax advantages for employers

Tax advantages for employers

  • Federal tax exemptions – employer contributions to employee HSAs are not subject to withholding for federal income tax, the Federal Insurance Contributions Act (FICA), Federal Unemployment Tax Act or Railroad Retirement Tax Act
  • State tax exemptions – in many cases, HSA contributions are exempt from state income tax as well

Check with your tax advisor to determine your specific state rules.

Reduced administrative responsibility and cost

Reduced administrative responsibility and cost

  • No expense verification needed – employers are not required by law to ensure employees use HSA funds for qualified medical expenses
  • Automatic claims processing – there’s no administrative work required, making HSAs significantly more affordable than other benefit plans

Flexible ATM and Merchant Category Code (MCC) restrictions

Flexible ATM and Merchant Category Code (MCC) restrictions

Visa HSA cards can be issued with any of the following restrictions:

  • Full – limits card use to healthcare-related MCCs and prohibits use at ATMs
  • Partial – limits card use to MCCs OR prohibits card use at ATMs

Income for trustees and custodians

Income for trustees and custodians

  • New consumer accounts and services – HSAs provide financial institutions with additional products and services to offer corporate banking clients
  • New revenue sources – HSAs provide a new source of deposit income for financial institutions, as well as potential for fee income and investment income.

Visit the IRS website to learn more

Flexible Spending Account (FSA)

Flexible Spending Account (FSA)

An FSA lets employees set aside a portion of their salary pre-tax to pay for qualified medical or dependent care expenses. Employees can only get an FSA through their employer. Explore the unique features of an FSA. Learn more

An FSA lets employees set aside a portion of their salary pre-tax to pay for qualified medical or dependent care expenses. Employees can only get an FSA through their employer. Explore the unique features of an FSA. Hide

Benefits for employees

Benefits for employees


Tax advantages for employers

Tax advantages for employers

  • Pre-tax contributions – employers can lower payroll taxes by making contributions to employee FSAs
  • Unused funds default to employer – if employees have not used all FSA contributions at year’s end, they will lose the unused portion. Employers may use reverted funds to provide benefits and/or offset administrative costs, subject to ERISA’s exclusive benefit requirement.

Note: Per the IRS, employers may offer an FSA with a carryover option that lets employees roll over up to $500 of unused funds.

Transit and Dependent Care expenses

Transit and Dependent Care expenses

Similar FSA arrangements are allowed under the Internal Revenue Code for these expenses:

  • Transit
  • Parking
  • Dependent care

Talk to your issuer about the options available for your company benefit plan

Annual contribution limits

Annual contribution limits

Current law provides for the following federal caps on FSA contributions:

  • Medical – $2,550 effective 1/1/2015
  • Transit – $130 per month
  • Parking – $250 per month
  • Dependent care – $5,000 ($2,500 if married filing separate returns)

Note: Tax benefits do not apply to contributions above the applicable cap. Cap amounts are subject to change per the IRS, so you should always consult the IRS website for the most current amounts.

Health Reimbursement Arrangement (HRA)

Health Reimbursement Arrangement (HRA)

An HRA is usually coupled with high-deductible health coverage to help an employee pay for qualified medical expenses. Employees can only get an HRA through their employer, and only the employer can contribute funds. Explore the unique features of an HRA. Learn more

An HRA is usually coupled with high-deductible health coverage to help an employee pay for qualified medical expenses. Employees can only get an HRA through their employer, and only the employer can contribute funds. Explore the unique features of an HRA. Hide


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