Compare health expense funds

Who is eligible?

All employees, as designated by the employer

Anyone covered by a qualified high-deductible plan

All employees, as defined by the IRS

All employees, as defined by the employer

Who can contribute?

Employer only

Employer, employee, or both.

Employer, employee, or both.

Employer only

Does the balance carry over?

Yes - plan can define carry-over limit; HRA balance can carry over to RRA.

Yes

Yes, up to $500, or a grace period may apply (but not both).

Yes

Can rollover contributions from another account be made to this account?

No

Yes, rollover contributions from another HSA are permitted; one-time rollover from IRA also permitted.

No

Can roll over funds from HRA

Is the fund or account portable?

No

Yes

No

No

Are there interest or investment earnings?

No

Yes

No

No

What are the tax advantages?

Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements may be excluded from the employee's gross income.

Employers with a cafeteria plan enjoy FICA tax savings.

Employers with a cafeteria plan enjoy FICA tax savings.

Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements may be excluded from the employee's gross income.

Are the contributions taxable income to the employee?

No

In addition, contributions are not subject to FICA or FUTA taxes.

Contributions are tax advantaged, including not being subject to FICA or FUTA taxes.

No

In addition, contributions are not subject to FICA or FUTA taxes.

No

In addition, contributions are not subject to FICA or FUTA taxes.

Are the distributions / reimbursements taxable income to the employee?

No

No, if made for qualified medical expenses; otherwise subject to income tax and 20% penalty.

No

No