Health Spending Accounts

An HSA is a tax-deductible savings account that is used to help individuals pay for current or future qualified medical expenses that are not reimbursed through health insurance or any other health reimbursement source (i.e. deductibles, coinsurance, vision, and dental services). HSA's are available with select plans Blue Cross VT plans.

Advantages of an HSA

• Money goes into the employee's HSA before state or federal taxes are deducted.
• There’s no “use it or lose it” rule: the money in the HSA belongs to the employee, and can be used during retirement or if the individual changes jobs.
• An HSA can help even out medical expense over time. Since the individual manages the funds, they can save HSA money when they are healthy, so it’s ready to use when needed.
• It provides potential triple-tax savings, because you pay no taxes on your
  contributions, earnings, or distributions

An HRA is funded by the employer to help employees pay for out-of-pocket health care expenses like deductibles, office visits, hospital stays, and prescription costs. The money an employee uses from the HRA for qualified services is tax-free. These are available with all of our Blue Cross and Blue Shield of Vermont group plans.

Benefits of an HRA

• The employer funds the account, which is tax-free to the employee.
• The employee doesn’t put their own money into the HRA.
• HRA money can be used for anyone covered by the health plan for qualifying expenses.

Available with any health plan, FSA's are an employer-sponsored benefits program offered to employees to help them set aside pre-tax dollars to pay for medical or dependent care expenses. The money in an FSA must be used up by the end of the year unless the employer allows FSA rollover or a grace period.

Advantages of an FSA

• Pre-tax contribution lowers the employee's tax burden and increases spending power for eligible health and dependent care expenses.
• Provides the ability to plan and budget for eligible expenses and smooth out anticipated expenses thanks to regular deductions spaced evenly across the year.