Managing your healthcare can be very confusing. Hiveaway aims to eliminate the confusion with healthcare spending, whether you have an HSA, HRA or FSA. Understanding more about your own healthcare plan can help you to better manage your spending. Below is a summary including a link to a table to help shine light on the differences and similarities between HSAs, HRAs and FSAs.
Health Savings Account (HSA)
Money may be taken from your paycheck before taxes or you can open up an individual HSA account and contribute money on your own. Money can be contributed by your employer or even a family member. To qualify for an HSA you must be a member of a “high-deductible health plan.” This means that your plan — in many cases a PPO — requires that you pay a certain amount of money up front before your plan coverage kicks in. The great news is that your HSA funds can be used to pay for this deductible. You can also use this money into the future — letting you save for medical expenses down the road. So, even if you chicken out on your LASIK eye surgery, you don’t lose that money. Check out Aetna’s HSA calculator to find out more about the savings opportunities and tax advantages an HSA could provide for you.
Health Reimbursement Arrangement (HRA)
HRA Fast Facts — An HRA is an account offered to employees or retirees, where you can use the money to pay for deductible and co-insuranceamounts, or covered medical expenses. Like an HSA, leftover dollars generally can be used from year-to-year, as long as you continue to be a member of the plan. Also, the money is contributed by your employer and doesn’t count as income; saving you valuable tax dollars — complete with Uncle Sam’s stamp of approval.
Flexible Spending Account (FSA)
FSA Fast Facts — With an FSA, money is taken from your paycheck before taxes (you set the amount) and put into an account. You can then use that money to pay for medical expenses throughout the year. It’s important to understand that FSAs have a “use it or lose it” provision — meaning that you must use the dollars in the year in which they are saved or you will lose them at the end of the year. Check with your plan to make sure expenses are “covered,” meaning they are approved by the Internal Revenue Service as a qualified medical expense that can be paid for with your tax-free dollars. For example, while the cold medicine and band-aids you pick up at your local pharmacy can be paid for with your FSA funds, the magazines you buy at that same pharmacy would not be covered.
http://www.planforyourhealth.com/open-enrollment/article/show/fsa-hsa-hra-what-does-it-all-mean/
A comprehensive comparison table can be found here.
http://www.garveybenefits.com/hsahrafsa_plan_comparison.asp
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