How Does an HRA Work with a FSA Plan?

How Does an HRA Work with a FSA Plan?

It’s simple – more employee choice and flexibility.  One size does not “fit all” and an HRA would not be established to cover every employee’s medical expenses.

Benefit Comparison FSA HRA
Small/Large Employers Yes Yes
C-Corp Owners Yes Yes
Self-Employed No No
Plan Document Yes Yes
SPD Yes Yes
Can maintain current health provider relationship Yes Yes
Employer contributions Optional Required
Employee contributions Optional No
Employee tax savings Claim Reimbursements are tax free Claim Reimbursements are tax free
Employer tax savings Business expense—plus 7.65% of employee contribution Business expense deduction for payments
Account pre-funded by employer Yes No
Roll unused dollars to next year No Yes
Reimburse IRC Section 213 (d) medical expenses not covered by any other plan Yes Yes
Claims substantiation Yes Yes
Debit card Yes Yes
Insurance premiums paid from account No Yes
Long-term care premiums paid from account No Yes
Annual IRS-DOL Form 5500 (no tax due) No**/Yes No**/Yes
COBRA applies *Yes Yes
HIPAA certification rules apply *Generally No Yes
HIPAA privacy and security rules apply Yes Yes
Account retained by employee upon termination of employment? No No, but terminated employees may be covered by plan
  * Special rules apply
** Generally, if over 100 participants; Welfare benefits rules apply

Information for the graph provided by MHM

MMMA continues to be in the forefront of health care changes.  For more information on MMMA’s Advantage Health Plan on HRAs and FSAs, contact Sheelah at the MMMA office, 636-537-1360 or (800) 467-MMMA (6662), or by email to

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