Personal Funding Accounts

  • Personal funding accounts provide healthcare dollars for members to use when paying for qualified medical expenses. The 3 types are the health savings account (HSA), the health reimbursement arrangement (HRA), and the flexible spending account (FSA).

    Funding account comparison HSA HRA FSA
    Available for individual and small group plans check X X
    Available for mid-size and large group plans check check check
    Requires qualified high-deductible health plan check X X
    Employee contributions allowed check X check
    Employer contributions allowed check check check
    Employer owns the account X check check
    Account funds can be invested check X X
    Unused funds stay in the account until used check N/A* N/A*
    Account is fully portable check X X

    *HRA and FSA funds roll over annually at the employer's discretion.

    Health savings account (HSA)

    A health savings account is a member-owned account that works in conjunction with a qualified, high-deductible health plan that allows members to save for eligible medical expenses through tax-advantaged contributions. Each year, total contributions to an HSA (by the employer, the employee, or anyone else on behalf of the employee) may not exceed the annual limit set by the IRS. If offered by the plan administrator, funds in an HSA may also be invested by members in money market accounts, mutual funds, and other financial options permitted by IRS rules.

    Learn more about HSAs

    HSA On Demand

    Serving self-funded groups, HSA On Demand offers employees peace of mind when enrolling in a qualified high-deductible health plan as an easy, low-risk solution. Like overdraft protection for a checking account, HSA On Demand gives employees up-front funds when they don’t have enough money in their HSA to cover qualified medical expenses. As future contributions are made to the account, the funds are repaid without interest until the balance hits zero.

    Learn more about HSA On Demand

    Health reimbursement arrangement (HRA)

    A health reimbursement arrangement is an employer-sponsored and funded healthcare account that mid-size and large group employees can use to help pay for qualified medical expenses. An HRA must be paid for solely by the employer; employees are not permitted to make contributions.

    Because we administer both the health plan and the HRA, our integrated claims processing allows HRA funds to be automatically applied to qualified medical expenses, so in most cases there’s no need for members to fill out forms or wait for reimbursement checks. We pay all HRA-eligible expenses on behalf of the employer at the time claims are processed. Employers then reimburse us via convenient electronic funds transfer.

    Learn more about HRAs: Where the member pays first | Where the HRA pays first

    Flexible spending account (FSA)

    A flexible spending account is a tax-advantaged, employer-owned healthcare spending account that mid-size and large group employees can use to pay for eligible medical expenses. FSAs can be paired with many of our health plans. Note: Some FSAs can be offered together with other personal funding accounts, with certain restrictions. We encourage employers to consult their tax and legal advisors regarding which type or combination of spending accounts they should consider.

    Learn more about FSAs

    Healthcare payment cards

    HSA and FSA plan members receive a healthcare payment card with their welcome kit. The card is a debit card through UMB Financial Corporation which is widely accepted by providers and retailers. The card can be used only for qualified healthcare expenses as outlined in the plan.

    Please note: This information is not intended to provide tax or legal advice. Employers and their employees should consult with their own legal or tax advisors regarding their particular circumstances before taking action. This material cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.