HSA, FSA, HRA: What's the Difference?

We've received a few questions on HSAs (Health Savings Accounts), FSAs (Flexible Spending Accounts), and HRAs (Health Reimbursement Arrangements) lately, today we're discussing what they are and their role in nutrition counselling.

We hope this post answers any questions you have about patients who ask about HSAs, FSAs, and HRAs!

The Breakdown of Each Plan

HSAs are Health Spending Accounts that act like personal bank accounts for health expenses.

Features:

  • Can be paid by anyone (you, your employer, or a family member).
  • Must have an eligible high deductible plan with your health insurance to have an HSA
    • Minimum deductible required to be eligible for an HSA is $1,300 (individual) and $2,600 (family)
  • You personally own the account
  • If you change jobs you can take the money with you
  • Unused money carries over to the next year 
  • Maximum contribution limit for 2016 is $3.350 (individual) and $6,750 (family)

FSAs are Flexible Spending Accounts that are similar to HSAs in that they help cover qualifying medical charges. 

Features: 

  • Funded through a salary deduction (before taxes) from your employer 
  • Your employer owns the account
  • Maximum deduction is $2,550 per year
  • No health plan required 
  • Unused money is NOT carried over at the end of the year

HRAs are Health Reimbursement Arrangements

Features: 

  • Funded through funds that are specifically set aside by employers (instead of a salary deduction)
  • Your employer is the only one who can contribute money
  • Your employer owns the account
  • Qualified medical expenses are determined by your employer 
  • No insurance plan required
  • It's up to your employer if you can carryover unused money

What are 'Qualified Medical Expenses?'

There is a wide variety of medical expenses that patients can pay for with these plans. Some examples include deductibles, co-payments, and prescription medicine. Essentially, these plans help pay for a variety of medical expenses that may not necessarily be covered by traditional insurance plans (except for health insurance premiums). 

For a comprehensive list, check out Publication 502 for Medical and Dental Expenses from the IRS. This will tell you more about what expenses qualify for the plans.

How Does This Apply to Nutrition Counselling and Billing? 

These accounts can indirectly help pay for nutrition counselling sessions by covering patients' deductibles or co-pays, after which their insurance kicks in. When you have patients who use HSAs, FSAs and HRAs this way, you'll still need to file claims for the insurance portion.

Or the accounts can be used directly for certain counselling sessions such as diabetes management. As always, make sure you check your patients' plan benefits to know their coverage. When this method is used, you don't need to file claims for your patients to be covered for your services. They take the money from the account and 'pay out of pocket'.