HRA, HSA and more
Integrum Advisors works with various vendors to provide HRA, HSA and FSA arrangements for you and your employees.
Health Reimbursement Accounts (HRAs), also known as Health Reimbursement Arrangements, are U.S. Internal Revenue Service (IRS)-sanctioned, employer-funded, tax-advantaged employer health benefit plans that reimburse employees for out-of-pocket medical expenses. Using a Health Reimbursement Account yields tax advantages to offset healthcare costs for both employees as well as employers.
A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Funds roll over and accumulate year to year if not spent. HSAs are owned by the individual. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Withdrawals for non-medical expenses are treated very similarly to those in an Individual Retirement Account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier.
A Flexible Spending Account (FSA), also known as a Flexible Spending Arrangement, is a tax-advantaged financial account that can be set up through a U.S. employer’s cafeteria plan. An FSA allows an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses but often for dependent care or other expenses. Money deducted from an employee’s pay and placed into an FSA is not subject to payroll taxes, resulting in substantial payroll tax savings. Before the Patient Protection and Affordable Care Act, one significant disadvantage to using an FSA was that funds not used by the end of the plan year were forfeited to the employer, known as the “use it or lose it” rule. Under the terms of the Affordable Care Act, a plan may permit an employee to carry over up to $500 into the following year without losing the funds.