Beyond health insurance: consumer-directed coverage

Beyond Health Insurance

A quick look at extra options you may have for handling high health costs:

FSA

(FLEXIBLE SPENDING ACCOUNT)

Employers set up these tax-free accounts for employees. Both can contribute, but no more than a combined annual total of $3650 for a single employee or $7300 for a family account. Each year, employees designate how much they’ll take from their salaries to pay for qualified expenses not covered by health insurance. Unspent funds at the end of the year are forfeited.

HSA

(HEALTH SAVINGS ACCOUNT)

Employers can set up these tax-free accounts for employees … and individuals can set them up for themselves to pay for qualified health expenses. This plan is only available if you have an IRS-approved “high deductible” health plan. Accounts can receive tax-free contributions from anyone. Unspent funds at the end of the year carry over.

MSA

(MEDICAL SAVINGS ACCOUNT)

No longer available … unless you started one prior to 2008. Like HSAs, they supplement high deduct ible health plans, and unspent funds can be carried over year-to-year. Still have one? You can keep it going or roll it over into an HSA.

HRA

(HEALTH REIMBURSEMENT ARRANGEMENT)

Only employers can fund these tax-free accounts. Employees can’t contribute. The employer’s funds can be used to pay for qualified health expenses or health insurance premiums. Unspent funds at the end of the year carry over.