HRA vs HSA vs FSA vs PRA Comparison Chart

Posted by Rick Lindquist on Thu, May 10, 2012 @ 10:35 AM

pie chart cartoon1 resized 600 Comparison charts provide an excellent way of summarizing complex information. As a follow-up to yesterday's HRA case studies, check out this HRA, HSA, FSA, PRA comparison chart. It's a good summary of the key differences between the four primary types of health care reimbursement accounts and arrangements.

What does HRA, HSA, FSA, PRA Stand for?

HRA = Health Reimbursement Arrangement

HSA = Health Savings Account

FSA = Flexible Spending Account

PRA = Premium Reimbursement Arrangement

HRA, HSA, FSA and PRA Feature Comparison

	HRA	HSA	FSA	PRA
Who may Contribute	Employer Only	Employer or Employee	Employee or Employer	Employee (final rules pending)
Cost of Employer Contributions	Only pay for Utilization (typically 25-50%)	100% Paid regardless of Utilization	n/a	n/a
Average Cost to Cover $2,000/year Deductible	$500-1,000	$2,000	$2,000	$2,000
Maximum Annual Contribution	No Maximum	$3,250 (single) $6,450 (family) for 2013	Determined by Employer; Capped at $2,500 starting in 2013	Determined by Employer; usually total compensation
Eligibility Requirements	None or Determined by Employer	Must have HSA-qualified health coverage ($1,250+ single / $2,500+ family)	None or Determined by Employer	None or Determined by Employer
Each Employee must open new Bank Account?	No	Yes	No	No
Tax Treatment	Tax-free	Tax-free	Tax-free	Tax-free
Medical Expenses Allowed	Health Insurance Premiums + IRC 213(d) as Determined by Employer	IRC 213(d) Expenses w/ No Employer Limitations	IRC 213(d) Expenses; but no Personal Health Insurance	Personal Health Insurance only
Use for Non-Medical Expenses	None	None	None	None
Carryover of Unused Funds to Next Year	Determined by Employer	Yes	No	No
Portable after Termination	Determined by Employer	Yes	No	No
Administrator	Employer or TPA	Employee	Employer or TPA	Employer or TPA
Cross-Compatibility	With HSA* or FSA	Limited-Purpose or Post-Deductible FSA or HRA	With HRA or HSA*	With HRA, HSA, or FSA
Employer Reporting	Employer Views Detailed Utilization Reports	No Tracking Possible	Employer Views Detailed Utilization Reports	Employer Views Detailed Utilization Reports

*HSAs are fully compatible only with certain HRA & FSA administration platforms that enable HSA-Compatibility

Note: This should not be taken as legal or tax advice.

Tags: charts, hras, hra, fsa, hsa, pra, fsas, pras, hsas, health savings acount, health reimbursement arrangment

Comments

The work you're doing to get this information out is awesome. Thank you.

Posted @ Thursday, May 10, 2012 12:38 PM by Nick O'Connor

I have a question...can a retired person not 65 yrs of age start an HSA account using monies from an Ira

Posted @ Monday, January 14, 2013 7:25 PM by Cindy Narr

Hi Cindy,

According to publication 969:

"Qualified HSA funding distribution. A qualified HSA funding distribution may be made from your traditional IRA or ROTH IRA to your HSA. This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made.
The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. The qualified HSA funding distribution is shown on Form 8889, Part I, line 10 for the year in which the distribution is made.
You can make only one qualified HSA funding distribution during your lifetime. However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled.

Example.

In 2011, you are an eligible individual, age 57, with self-only HDHP coverage. You can make a qualified HSA funding distribution of $4,050 ($3,050 plus $1,000 additional contribution).

Funding distribution – testing period. You must remain an eligible individual during the testing period. For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2011, your testing period begins in August 2011, and ends on August 31, 2012.
If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. You include this amount in income in the year in which you fail to be an eligible individual. This amount is also subject to a 10% additional tax. The income and the additional tax are shown on Form 8889, Part III.
Each qualified HSA funding distribution allowed has its own testing period. For example, you are an eligible individual, age 45, with self-only HDHP coverage. On June 18, 2011, you make a qualified HSA funding distribution of $3,050. On July 27, 2011, you enroll in family HDHP coverage and on August 17, 2011, you make a qualified HSA funding distribution of $3,100. Your testing period for the first distribution begins in June 2011 and ends on June 30, 2012. Your testing period for the second distribution begins in August 2011 and ends on August 31, 2012.
The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period."

Posted @ Thursday, January 17, 2013 9:48 AM by Rick Lindquist

Is the zane system savings Examples used to show how the HRA work's? If
so it shows that the employee is using there pretax income or 50/50
paid by employer. Yet in the HRA vs HSA vs FSA vs PRA Comparison Chart it show that only the Employer can Contribute am i missing something?

Posted @ Sunday, February 17, 2013 12:37 PM by ken

The Zane System Savings Examples assumes an employer combines a PRA with an HRA.

Posted @ Tuesday, February 19, 2013 7:20 AM by Rick Lindquist

Please call me at 925-683-6907

Posted @ Monday, February 25, 2013 3:44 PM by Bob Sciutto

Hi Bob,

I've forwarded your request to the biz dev team.

Posted @ Monday, February 25, 2013 4:38 PM by Rick Lindquist

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