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 |
Page 2
|
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.
