Personal Funding Accounts

  • You may qualify for--or your employer may offer--a personal funding account (PFA). There are different types of personal funding accounts, but the one thing that they all have in common is that they allow you to use pre-tax funds to pay for specific healthcare costs.

    Personal funding account comparison HSA HRA FSA
    You own the account. check X X
    Your employer owns the account. X check check
    You must have a high-deductible health plan. check X X
    Only your employer can put money in. X check X
    You and your employer can put money in. check X check
    You can invest the money in the account. check X X
    Must report account when you do your taxes. check X X
    The money in your account rolls over annually. check X X

    Flexible spending account (FSA)

    A flexible spending account is a special account offered by your employer. There are 2 types of FSAs: healthcare FSAs, and dependent care FSAs. They allow you to pay for qualified healthcare or dependent care expenses on a tax-free basis.

    You aren't taxed when you deposit funds, or when you withdraw money for qualified healthcare expenses.

    More about flexible spending accounts

    Health savings account (HSA)

    A health savings account is a special account that covers preventive exams and screenings in full. An HSA allows you to save money tax-free and use it to pay for current and future IRS-approved healthcare expenses, such as your health plan's deductible, copays, and coinsurance.

    You can also save and invest your money and let it grow tax-free over time to use in the future.

    More about health savings accounts

    Health reimbursement arrangement (HRA)

    A health reimbursement arrangement is an account funded by your employer. You can use the funds in your HRA account to help pay for your healthcare costs on a tax-free basis. Only your employer can contribute to your HRA. You use these funds to pay for any qualified healthcare expense incurred by you or your dependents.

    There are different types of HRAs. Each type of HRA covers a different set of eligible healthcare expenses, which may include health plan deductibles, coinsurance, or copayments; vision or dental care; hospital charges; lab fees; prescriptions; and specific over-the-counter items.

    More about health reimbursement arrangements

    Note: This material is not intended to be tax or legal advice. The reader should consult with his or her own tax advisor to determine the tax implications of purchasing the products discussed herein. Advice, if any, included in this material was not intended or written by Premera to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.