OptumHealthBank.com - Other Health Accounts

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Other Health Accounts

Health accounts offered through employers can help you save money on taxes and make it easier to pay for health care. Besides HSAs, the two most common health accounts are:

Flexible spending accounts (FSAs) - Employer-sponsored FSAs let you set aside pre-tax earnings to pay for eligible health care costs. A second type of FSA can help you pay for day care for a child or adult dependent. A commuter expense account works like an FSA and helps you save money to pay costs like parking and mass transit for going to and from work.

Health reimbursement accounts (HRAs) - Employer-funded HRAs give you money to spend on eligible out-of-pocket medical expenses. You receive the money income-tax free, so it doesn’t increase your taxable income.

HSAs and Other Health Accounts
You may not contribute to a health care FSA and an HSA during the same year. You can, however, have an HSA plus:

An FSA for dependent care.
A commuter expense account.
A limited-purpose FSA for vision and dental expenses.
If your employer offers an HRA, you may be able to use it for certain expenses and still contribute to an HSA.

If your employer offers an HRA, you may be able to use it for certain expenses and still contribute to an HSA.

Key Differences Between Health Accounts

FSAs and HRAs can be used with any type of health plan and are offered through and owned by employers.
HSAs are sometimes offered by employers, but are owned by the individual account holders. HSAs can only be used with eligible high-deductible health plans.

Other differences include:

	HSA	FSA	HRA
Contributions	Account owners make tax-deductible contributions. Some employers will see that contributions are deducted before taxes in payroll checks. Employers, family members and any other individuals can also contribute.	Employee makes pre-tax contributions. Employer can contribute as well, although that is not common.	Employer deposits an amount each year for each individual or family.
	Funds are available for withdrawal as defined in the Funds Availability Disclosure (PDF).	The entire contribution amount is available on the first day of the plan year.	The employer chooses when contributions become available for spending.
	Funds remaining at the end of the plan year remain in the account for future medical expenses.	Funds remaining at the end of the plan year (or grace period following the plan year, if any) are forfeited to the employer.	Funds remaining at the end of the year can be carried over if the employer allows.
	The IRS establishes annual contribution limits.	The employer determines contribution limits. Beginning January 1, 2013, the pre-tax contributions limit will be $2,500 for a health care FSA.	The employer sets the contribution amount.
Payment options	OptumHealth bank offers a debit card, online bill payment or checks to pay medical bills. Self-reimbursement for qualified medical expenses is also allowed.	Debit card, if offered by account administrator, or account holders pay for eligible expenses and submit requests for reimbursement.	Debit card, if offered by account administrator, or account holders pay for eligible expenses and submit requests for reimbursement.
Interest	Tax-advantaged interest can accrue.	No interest.	Generally no interest accrues.
Investments*	Investment options are available.	No investment.	Investment options may be available, depending on employer’s benefit plan.
Tax implications**	Account distributions are income-tax free when used for qualified medical expenses.	Employee contributions are made pre-tax, reducing annual taxable income. Reimbursements are income-tax free.	Reimbursements are income-tax free.
Qualified Medical Expenses	Any out-of-pocket and unreimbursed expenses allowed under section 213(d) of the Internal Revenue Code, except amounts distributed to pay health insurance premiums. Premiums can be reimbursed for: Health insurance for people 65 and older (except Medicare supplement policies) COBRA premiums Long-term care premiums. Health insurance premiums for people receiving unemployment compensation	Employers configure the account to reimburse all* or some of any otherwise unreimbursed expenses as defined under section 213(d) of the Internal Revenue Code. * Health insurance premiums and long-term care services are not reimbursable. Note: There are also FSAs for dependent care expenses and commuter expense accounts.	Employers configure the account to reimburse all* or some of any otherwise unreimbursed expenses as defined under section 213(d) of the Internal Revenue Code. * Long-term care services and premiums for coverage under employer pre-tax plans are not reimbursable.

** States can choose to follow the federal tax treatment guidelines for health savings accounts (HSAs) or establish their own. Some states have chosen to tax HSA contributions. Talk to your financial advisor or consult your state department of revenue for more information.

Investments are not FDIC-insured, are not guaranteed by OptumHealth Bank and may lose value.

Health savings accounts (HSAs) are individual accounts offered by OptumHealth Bank^SM, Member FDIC, and are subject to eligibility and restrictions, including but not limited to restrictions on distributions for qualified medical expenses set forth in section 213(d) of the Internal Revenue Code. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment, and restrictions. Federal and state laws and regulations are subject to change.

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