Topic	MSA	HSA	HRA	FSA
1. Purpose	To encourage employees to be more judicious in purchasing healthcare with savings from the purchase of high deductible medical plans from low deductible plans – balance not used can be invested or saved for retirement – MSA plan not available after 12/31/03	100% paid by employer to employee - purpose to pay for unreimbursed medical costs. Same concept as MSA effective January 1, ‘04	100% paid by employer to employee – purpose to pay for unreimbursed medical costs.	100% employee’s money to pay pre-tax various medical and daycare expenses currently paid after tax
2. Who pays?	Either 100% paid by employer OR employee	Employer and employee may SHARE the cost	100% funded by employer	100% funded by employee
3. Maximum amount allowed to be deducted	$2,600 individual $5,150 family	$2,600 individual $5,150 family add $500 if over age 55	No maximum	No maximum for medical, $5,000 maximum for dependent daycare
4. What happens to moneys NOT used?	Goes to savings account	Goes to savings account	Goes back to the employer however it can be “banked” year after year – never can be cashed.	Back to the employer or distributed equally to the plan participants
5. Penalty if taken before age 65	Yes, 15%	Yes, 10%	---	---
6. Is Long Term Care an allowable expense?	___	Yes	Yes	No
7. Is dependent daycare an allowable expense?	___	No	No	Yes
8. Eligibility	Any individual or employee up to 50 employees	Any individual or employee – no limit to size of company	Any C Corp. employee. S Corp. or sole proprietor employees not eligible. Partners in a partnership, shareholders who own more than 2% stock in a Sub-S Corp. and members of an LLC are also not eligible.	Same as HRA

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Topic	MSA	HSA	HRA	FSA
9. May there be a range of benefits within a group? i.e. deductibles, co-insurance, choices	__	Within a group insurance plan, it depends on the insurance company, but if available, yes.	Yes – employer can design different classes of employees, i.e. department heads, management, salaried, etc.	N/A 100% employee’s money
10. May there be a range of employer contributions?	Can not be discriminatory	Same	Yes, corporation can provide, as an example – department heads $150 per month, management personnel $100, others, $75.	N/A
11. Best suited use by	__	Individuals or employees of small or mid sized businesses	Employees of small or mid-sized business	An employee with high after tax medical costs
12. Discrimination factor	__	No. Group plans – must not be discriminatory – Individual plans – of course anyone may apply	No	Yes. Highly compensated employees cannot have more than 25% of total salary reductions.
13. Can the employer administer these plans?	__	Individual – Yes, employee in a group – No, No, No (because of HIPPA)	No, No, No	No, No, No

This table was prepared by Ned Miller in Albuquerque, New Mexico in January 2004, edited by Tony Novak at Freedom Benefits and reprinted with permission of the author.