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HSAs, MSAs, and HRAs

Those that are familiar with Medical Savings Accounts (MSAs) know that they operated in a somewhat similar fashion to the newer Florida Health Savings Accounts (HSAs). However, there are important differences between the two that you should know about.

First, for HSAs, contribution limits have been raised. Whereas MSAs were limited to 65 percent of the deductible for individual accounts and 75 percent of the deductible for families, HSAs allow a contribution of 100 percent of your florida health planýs deductible. Also, unlike MSAs, HSAs allow contributions from both individuals and employers in the same calendar year to make sure your account is as fully funded as possible. Also, with HSAs, some first-dollar benefits or low-deductible benefits are allowed, but only for preventive care.

More people qualify for HSAs than qualified for MSAs ý HSAs are available to individuals who are not self-employed, as well as groups who number over 50. Catch-up contributions have been established for HSAs, and the number of accounts that can be established is unlimited. Finally, HSAs are a permanent feature of the tax code, so they are here to stay.

Health Reimbursement Arrangements (HRAs) are another type of health plan that, like HSAs and MSAs, are driven by the consumer. The primary difference between an HSA and an HRA is the fact that an HRA is not portable if the employee leaves. This means that any extra money in the account stays with the employer after you no longer work there. The main effect this has is that it decreases the incentive to employees to save money in their health-care choices. Because they donýt get to keep the money, they will ultimately want to use all the can rather than lose money from the account in the end.

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