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POSTED BY ADMIN ON FEB 25, 2016 IN HR BENEFIT ADVISORS BLOG, HRA, THE BLOG |COMMENTS OFF ON HRAS, HSAS, AND HEALTH FSAS – WHAT’S THE DIFFERENCE?
Health reimbursement arrangements (HRAs), health savings accounts (HSAs) and health care flexible spending accounts (HFSAs) are generally referred to as account-based plans. That is because each participant has their own [HSA Funding Levels] account, at least for bookkeeping purposes. Under the tax rules, amounts may be contributed to these accounts (with certain restrictions) and used for health care on a tax-favored basis.
The Patient Protection and Affordable Care Act (PPACA) has added new requirements that affect HRAs and HFSAs. Most HFSAs and HRAs will need to be amended to meet the new PPACA requirements. HSAs generally are not affected by PPACA.
The chart below describes the main characteristics of these types of accounts.