Title Image


The ABCs of health care accounts

  |   Cash Flow Planning and Management, Health Insurance

As if medical insurance is not confusing enough, the various types of accounts available to pay for out-of-pocket expenses may be even more confusing.  There are numerous types of accounts and unfortunately the acronyms are all similar….HSA (health savings account), FSA (flexible spending account or arrangement), MRA/HRA (medical/health reimbursement account or arrangement).  Due to the confusion, many people don’t take advantage of the accounts, even though utilizing them can be beneficial.  Such benefits include income tax deductions and the ability to save tax free for current and future out-of-pocket expenses.

Source: BCBS Blue Care Network of Michigan


If you buy your own insurance, it is a little easier, because your only option is an HSA, and that is only available if you purchase a high-deductible plan.  For those who are insured through an employer plan, any of the above-referenced accounts may be available.  The chart below provides a concise summary of the various account types.

Do you know to which, if any, of the above accounts you have access?  If so, do you understand the rules around what the funds can be used for and any deadlines for when the funds must be spent? (A tip…funds in an HSA can be invested and not spent for years, while there are strict deadlines for when funds in an FSA must be spent.)  Mid-year is a great time to review your account(s) and make sure that you take advantage of  whatever benefits are available to you!

AUTHOR - Tammy Wener

As co-founder of RW Financial Planning, Tammy oversees the financial planning process for all clients and manages the day-to-day operations of the firm. She truly enjoys getting to know her clients and is not shy about asking questions. Tammy has 15+ years of experience in the financial planning and estate planning fields and has worked with a broad range of clients including: couples simultaneously planning for financial independence, caring for their parents, and saving for college; newly widowed and divorced women looking to become more financially literate; young couples just starting out; families juggling the demands of a child with special needs; and financially independent individuals and couples exploring “what comes next.”