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Health accounts offered through employers or by banks and other financial institutions can help you save money and make it easier to pay for health care. The three most common health accounts are:

What's the difference?

  • 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 account holder, and they can only be used with high-deductible health plans.

Other key 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 pretax contributions. Employer can contribute as well, although that is not common. Employer deposits a set amount each year for each individual or family.
Funds are available when they are deposited into the account. The entire contribution amount is available on the first day of the plan year. The employer chooses whether to make the entire amount available on the first day of the plan year or prorate the contributions throughout the year.
Funds remaining at the end of the plan year are left in the account for future medical expenses. Funds remaining at the end of the plan year 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. The employer sets the contribution amount.
Payment options Debit card, online bill payment or self-reimbursement for qualified medical expenses. 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-deferred interest can accrue. Investment options are often available, if individuals choose. No interest. No interest.
Tax implications Account distributions are tax-free when used for eligible medical expenses. Employee contributions are tax-free, reducing annual taxable income. Reimbursements are tax free. Reimbursements are tax-free.
Eligible 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
    		Any out-of-pocket and unreimbursed expenses allowed under section 213(d) of the Internal Revenue Code, except health insurance premiums and long-term care services.

    Note: FSAs can also be used for dependent care and commuter expenses.

    		 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 pretax plans are not reimbursable.

    Health savings accounts are offered by OptumHealth Bank, Member FDIC, and are subject to eligibility. 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 regulations are subject to change. Please check your health benefit plan materials to determine whether your employer will make supplemental contributions to your HSA.

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

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    HSA User Guide

    Download a copy of the HSA User Guide from OptumHealth Bank. It’s got everything you need to know about owning and managing a health savings account.