A qick review of HSAs, FSAs & HRAs to support your employee benefits program and overall business objectives

1. The HR Connection Resource
Center Presents:
An Overview of three CDHP Benefits:
A simple but pertinent and timely
review of HSAs, FSAs and HRAs

2. Introduction
• First and foremost, for full disclosure purposes, I serve clients from
within the CDHP department at a local TPA organization
• Serving “my” clients, and their representatives, is the highlight as
well as the most rewarding aspect of my role!
• Having read a HR colleague’s post to a SHRM community chat over
the weekend, I was reminded of the fact that many of my fellow HR
practitioner’s may have a need to know of the information provided
• Finally, using my “from the trenches” approach I will share valid and
reliable information retrieved directly from the Internal Revenue
Service (IRS) website, as I so oftentimes reference and research to
support my writings
• This brief overview is provided for learning purposes only and is not
to be construed as any form of legal advice however, the resource
speaks for itself

3. Three CDHP Benefits
Within this presentation is basic information
regarding these benefits with additional rich
resources to allow you to explore your options
regarding:
• Health Savings Account (HSA)
• Flexible Spending Account (FSA)
• Health Reimbursement Account (HRA)
• Next, we’ll look at each one of these benefits
separately using the IRS, Pub. 969 as a resource
Resource: http://www.irs.gov/pub/irs-prior/p969--2012.pdf

4. HSAs
• To be offered with a High Deductible Health Plan (HDHP) as defined
by the IRS
• The employee and/or employer can contribute to the HSA (p. 4)
• There are limits imposed based on the type of HDHP plan
implemented (Beginning on p. 4)
• Contributions to an HSA belong to the employee and are portable
(they don’t lose these funds and can take them with them if they
leave) (p. 2)
• There are limitations and other rules/regulations offered within the
publication as well as other IRS related material
• Tax liability and reporting requirements plus other areas should be
reviewed for compliance by the employer as well as your
employees (Throughout this publication as well as other areas of
the IRS website)

5. FSAs
• A pretax benefit offered by the employer to provide employees a
reimbursement option for certain eligible expenses (p. 17) – Also
see Pub. 502
• Typically consist of employee contributions through PR deductions
but some employers will contribute. TIP! Additional rules &
regulations may apply to both the employee & employer (p. 17)
• Can be made available for reimbursements of qualifying expenses
of both medical (Max. $2500) and dependent care (Max. $5000)
• Employee is eligible for the maximum medical amount immediately
when Plan Year (p. 16) begins however, is not eligible for dependent
care reimbursements until funds are accrued
• Please note for information regarding child care expenses review
Pub. 15b as well as Pub. 503 (referenced in Pub. 15b)
• “Use it or lose it” plan. Funds contributed but not used during the
allotted timeframe will be forfeited (p. 17)

6. HRAs
• Must be funded solely by the employer (p. 18)
• No limit on the amount of funds you wish to contribute
to an HRA account (p. 18)
• Provided to employees to reimburse for qualified
medical expenses incurred (p. 18-19)
• Typically offered to assist employees with the medical
plan deductible expenses associated with a high
deductible health plan
• Employers own the funds contributed but not used at
the end of the Plan Year however, you may offer
rollover of funds into the next Plan Year (p.19)

7. IRS Resources
• Pub 969* - HSAs & Other Tax Favored Health
Plans (HRAs & FSAs) – 2012
• Pub 15 - Employer’s Tax Guide - 2013
• Pub 15 A - Employer’s Supplemental Guide - 2013
• Pub 15 B - Employer’s Tax Guide to Fringe
Benefits – 2013
• Pub 502* - Medical & Dental Expenses – 2012
Source: http://www.irs.gov/publications/index.html (08242013)
*Great resource for your employees

8. Additional Resources
• US Department of Labor (DOL) – ERISA, which also includes information related to
ACA http://www.dol.gov/ebsa/compliance_assistance.html
• US Department of Labor (DOL) – Small Business Resource Center
http://www.dol.gov/oasam/programs/osdbu/sbrefa/
• Internal Revenue Service (IRS) – Small Business & Self – Employed Tax Center
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed
• Affordable Care Act (ACA) - http://www.hhs.gov/healthcare/rights/index.html and
http://www.hhs.gov/regulations/index.html
• Society for Human Resource Management (SHRM) – Absolutely the best resource
for access to current HR related information
http://www.shrm.org/about/membership/Pages/default.aspx

9. TIPS and Recommendations
• TIPS! Take note of certain requirements, using the rich
resources provided regarding:
– Ineligible employees/Legal business entity
– Highly Compensated Employees (HCEs) and/or Key
Employees
– Nondiscriminatory requirements related to these plans
• Recommendations (from the trenches):
– Seek additional advice from Subject Matter Experts (SMEs)
such as legal counsel or CPAs
– Contact the regulatory agency for assistance as you can
see when viewing their websites, they are there to help

10. Conclusion
• The three CDHP benefits discussed can offer a savings to both you
and your employees
• Depending upon you specific circumstances & business goals and
objectives, having the opportunity to explore the basics of each
benefit will allow you to know where to go for additional
information so that you can choose the best value added benefit to
fit your needs
• These three benefits can be offered in conjunction with one
another. TIP! Watch for limitations when mixing these benefits
• The IRS offers a rich resource base covering many areas related to
employee benefits PLUS now you have information to tap into
additional agencies who regulate employee benefits which will add
more knowledge and professional development to your
HR/Benefits Administration toolkit.