Does the plan offer accounts that have tax advantages?

There are three common types of tax-advantaged accounts that can help you pay for medical costs:

  • Health reimbursement accounts (HRAs) 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. The employers funds and "owns" the account and funds can be rolled over year-to-year.
  • Health savings accounts (HSAs) often go hand-in-hand with high-deductible health plans. Funds in the savings account are tax exempt and are used to pay for qualified medical services. Unlike a flexible spending account, unspent funds roll over from year-to-year
  • A flexible spending account (FSA) helps you pay for qualified medical services not covered by insurance such as co-pays, deductibles, some drugs and other out-of-pocket expenses. Funds for the account are not taxed and are usually drafted out of an employee's pay on a monthly or quarterly basis. Funds do not roll over from year-to-year