Understanding Health Insurance
What is a premium? How can I save money on my prescription drugs? What is a health spending account? The more you know, the more confident you’ll be about the healthcare decisions you make for you and those you love.
Flexible Spending Account (FSA)
An arrangement set up through your employer to pay for many of your out-of-pocket medical expenses with tax-free dollars. These expenses include copays and deductibles, and qualified prescription drugs, insulin and medical devices. Typically, unspent FSA funds are not rolled over at the end of the year unless your employer’s FSA plan permits a grace period. (Note: Flexible spending accounts are sometimes called flexible spending arrangements.)
Health Reimbursement Account (HRA)
Health reimbursement accounts (HRA) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over and used in subsequent years. The employer funds and owns the account. Health reimbursement accounts are sometimes called health reimbursement arrangements.
Health Saving Account (HSA)
A type of savings account that allows you to set aside money on a pre-tax basis to pay for qualified medical expenses if you have a “high deductible” health insurance plan. Unspent HSA funds roll over year to year and may earn interest.