EMPLOYEE BENEFITS SOLUTIONS

HSAs, FSAs & HRAs

Optimize healthcare costs with HSAs, FSAs, and HRAs.

Using HSAs, FSAs and HRAs as part of your benefits strategy can help offset rising healthcare costs. These accounts are used to accrue and set aside funds for healthcare expenses and can offer tax advantages for both you and your employees.

These accounts are owned by your employees and are typically paired with a high-deductible health plan.

  • Triple tax advantaged
  • Lower insurance premiums for employers
  • Employer and employee contributions are tax deductible
  • Tax-free earnings and reimbursements for qualified medical expenses such vision care, dental care, prescriptions, and other eligible out-of-pocket costs not covered by your core health benefit plan.
  • Balances have the potential to grow through investments, to a predetermined limit
  • Employee owned and portable, accumulated funds roll over year-to-year and can be taken to other employers

While some employees initially may be disappointed with a high-deductible health plan, ongoing communication and education underscores how HSAs can reduce employee and employer healthcare costs.

Like HSAs, FSAs are employee owned and funded by you and your employees.

  • Pre-tax dollars from both can be set aside for eligible medical expenses not covered by your core health benefit plan.
  • Funds contributed must be used within the benefits plan year, with certain grace periods or small rollovers allowed, depending on plan design.
  • Employee contribution amounts can only be changed during annual open enrollment or due to a qualifying life event.
  • Unused funds in a plan year are forfeited and are not portable to new employers. FSAs are often referred to as “use it or lose it” plans.*

*Forfeited funds dependent on plan’s established grace periods or rollover allotments.

Offering FSAs appeals to existing and new talent, but careful administration is key to managing contributions, claims and compliance requirements. To avoid lost funds and dissatisfaction, plan design, communication and education are critical to employees’ clear understanding of “use it or lose it” scenarios.

Employers fund an HRA plan, and employees are reimbursed out of the HRA for certain out-of-pocket expenses not covered by your core healthcare benefit plan. This makes HRAs highly customizable to meet your specific organization or employee needs. Details and benefits can vary depending on how you design the plan. Typically:

HRAs are flexible and allow the employer to determine vesting schedules and portability of the plan if the employee leaves the company

Unlike HSAs, HRAs are not tied to any specific insurance plan. You determine and control contribution amounts, and which expenses are reimbursable.

HRAs provide employers with more predictable healthcare costs. They offer clear tax benefits to employers and employees because HRA reimbursements to employees are tax free.

Careful HRA plan design and administration are key to manage contributions, claims and compliance requirements.

Daybright is up to date on all of the recent legislative changes regarding HRAs:

The emergence of ICHRAs also benefits employees on Medicaid, and other classes of employees, including part-time and seasonal employees.

The Individual Coverage HRA (ICHRA) is particularly beneficial for employers looking for an alternative to traditional core health benefit plans, and offers more choice for employees. Employers now can reimburse premiums tax free to employees on their individually purchased health plans directly from insurers.

Get started

Back to the top