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Health Reimbursement Accounts The term "health reimbursement accounts" is somewhat of a misnomer. Also known as health reimbursement arrangements, or HRAs, these newer health plans from take care are not an "account" in the typical sense. In fact, as opposed to FSAs and MSAs - accounts set up by an employee - health reimbursement accounts are offered directly by the employer. Health Reimbursement Accounts - The Differences FSAs function as an actual account. Individuals place money into the account from which they can draw funds to pay for their medical expenses. These accounts are appealing because the money is tax-exempt, providing significant savings. Unfortunately, any money that is left over in the account at the end of the fiscal year has to be forfeited. With health reimbursement accounts, no money is ever forfeited - it simply rolls over for the next year. In fact, an HRA usually only exists on paper. An employer does not have to set a specific amount of money aside for an employee. Instead, the employee is reimbursed from HRA funds as eligible expenses are incurred. This is because an HRA is funded directly via the general assets of the employer's business. A wide variety of individuals are eligible for health reimbursement accounts. Current and former employees, their spouses and dependents (including those of deceased employees) are all eligible. There are no restrictions on group sizes, except for those individuals that are self-employed (for whom an MSA might be more interesting). |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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