HSA = Health Savings Account
FSA = Flexible Spending Account
Beginning January 1, 2011:
- Over-the-counter (OTC) medications are no longer eligible for reimbursement from a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA), unless obtained with a prescription (except for insulin).The excise tax for non-qualified HSA withdrawals doubled from 10% to 20%.
Beginning January 1, 2013:
- FSA employee salary reduction contributions were limited to $2,500 per plan year, with future increases to allow for inflation.
Beginning January 1, 2014:
- HRAs may need minor plan design changes to be ACA-compliant in 2014. HRAs will need to meet one of these five types of HRAs that are excluded from annual limit requirements outlined in health reform laws (PHS Section 2711):
- “Integrated” HRAs: An HRA linked with a group health plan.
- “Flexible Spending Arrangement” HRAs: A variation of a stand-alone HRA (as defined in section 106(c)(2)).
- “Excluded” HRAs: An HRA that only reimburses non-essential health benefits (e.g. only premium expenses).
- “Excepted” HRAs: An HRA that only reimburses limited excepted expenses (such as limited-scope dental).
- “Retiree” HRAs: An HRA offered to retirees.
What does this mean for existing and new HRAs? If the existing HRA does not meet one of these five types, then minor plan design changes may be needed. New HRAs will simply be set up in an ACA-compliant way.
There are several other health reform regulations that impact health insurance, employers, individuals and HRA/HSA/FSA providers.
HRA vs. HSA vs. FSA Comparison Chart
Here is an HRA, HSA, FSA Comparison Chart with health reform updates: