Employer Information and Resources  - CDH Plan Comparison

Comparison of Consumer-Driven Health Plans

Feature HSA HRA FSA
Who owns the money in the account? Individual Employer Individual (subject to "use it or lose it" rule at end of plan year)
Can the money be invested with interest earned? YES NO NO
How is the account funded? Deposited directly into the account. Employer funded as needed. Deposited directly into the account.
Is the fund portable? YES NO NO
Are the funds taxable? Contributions are 100% tax deductible.* Funds spent on medical expenses are tax-free for life. At 65, funds used to supplement income are tax-deferred. Funds used to pay for medical expenses are not reported as income. Contributions are 100% tax deductible.
Can the funds be used for non-medical expenses? YES, but they are subject to taxes and a 10% penalty. NO NO
How can an employee access funds? Employee has direct access to funds via debit card, internet or fax - Direct Deposit available. Employee provides receipt for services. Employee provides receipt for services.
Who can contribute to the account? Both employers and individuals. Employer only. Both employees and employers.
What type of health plan is required? HSA qualified high-deductible (2009).
Individual: $1,150.
Family: $2,300.
No requirements. No requirements.
Who is eligible? Any employee or individual under 65 who have a qualified High-Deductible Health Plan (HDHP). Current and former employees. No restrictions on group size. An employee who satisfies the eligibility requirements established by the employer.
Can the plan be included in a cafeteria plan? YES NO YES
Is there a "catch up" provision for older individuals? Yes, in 2009, an individual turning 55 or older may contribute an extra $1,000 per year. NO NO
Is there a maximum contribution per year? In 2009, $3,000 for individuals and $5,950 for families. Pro-rated by the effective date of health plan. NO. It is an arrangement by the employer to pay for medical expenses. NO

*Some states do not follow the federal HSA guidelines. Verify your state here.