The card is not the account.
- "The card tells me which account I have." Only the plan documents do.
- "Leftover FSA money rolls over." Generally only with a carryover or grace period in the plan.
- "A high deductible means I can fund an HSA." Contributing has its own conditions.
- "The HRA is my money." The company funds it under the plan's rules.
- "The card approved it, so it qualifies." The card is only a way to pay.
Start every conversation with the account's name as it appears in the plan documents. Neither the debit card nor the deductible tells anyone which account they have.
The HSA causes the most confusion, because owning one and contributing to one are separate questions. Someone can keep spending from an existing HSA after they stop being eligible to add money. To contribute, an employee generally needs qualifying coverage, and Medicare, other coverage and being someone's tax dependent all play a part.
One line per account, then the question to ask.
HSA
The employee's own account.
Say: "This account is yours. It goes with you if you leave, and it can only pay out what's been deposited." Then send eligibility questions to the administrator or a tax adviser.
Health FSA
Employer-sponsored, with deadlines.
Say: "You pick an amount for the plan year, usually through salary reduction. You can generally draw on the whole election at any point in the coverage period, but unused money is generally lost unless the plan has a carryover or grace period." Then give them the deadline for submitting claims.
HRA
Company money, company rules.
Say: "The company funds this account and reimburses eligible expenses under the plan's rules." Then give your arrangement's actual rules on year-end balances and on leaving.
Dependent-care FSA
A separate arrangement.
Say: "This is a separate account with its own rules." Explain it on its own.
Check the limits before anyone picks an amount.
For 2026, the health FSA salary-reduction limit is $3,400, and if the plan allows carryover, the most that can carry over is $680. For 2027, HSA contribution limits are $4,500 for self-only coverage and $9,000 for family coverage.
Illustrative: an employee who elects $3,400 in the health FSA and has a large eligible expense in the first month can generally be reimbursed up to the full election, subject to the plan's rules, before most payroll deductions have happened. With an HSA, the same employee could generally spend only what had already been deposited.
Our employer comparison covers plan design. We don't give tax advice, so have payroll or your tax adviser confirm anything that turns on an employee's own situation.
A note to send before enrollment opens.
Sample note to employees: "Before you choose an amount for next year, check which account our plan includes. An HSA is yours, and it stays with you if you leave. A health FSA comes with a deadline, and money you don't use may be lost unless the plan has a carryover or grace period. An HRA is funded by the company and follows the plan's rules. Keep every receipt, and never claim the same expense twice. If you're not sure you can contribute to an HSA, check with the administrator or a tax adviser first."
What to gather, and when to call us.
Have this ready
Plan documents that name each account. The plan year, the deadline for submitting claims, and whether there's a grace period or carryover. This year's limits from the administrator. The eligible-expense list and receipt process. Our cost-sharing talking points for anyone on a high-deductible plan.
Call us when
An employee with Medicare or other coverage wants to contribute to an HSA. You're adding or changing an account; our pre-tax plan and HRA pages cover the design side. Someone leaves with an FSA balance and nobody is sure about the claim window or continuation rights.
What HR asks us about the accounts.
Can we offer a health FSA alongside an HSA-qualified plan?
Pairing it with a general-purpose FSA, or with an HRA, can change whether employees can contribute to an HSA. Ask about a limited-purpose arrangement first, and have the administrator and your tax adviser confirm the setup.
How much should we tell an employee to put in?
Don't choose for them. Give them the plan year, eligible expenses, the claim deadline, whether a grace period or carryover applies, and the current limit, then let them decide.
What happens to each account when someone leaves?
The HSA stays with the employee. A health FSA generally stops when employment ends under the plan's rules, though there may be a window to submit claims or a right to continue coverage. For the HRA, the plan terms decide. For continuation coverage, see COBRA administration; we coordinate third-party administrators, and vendor fees may apply.
Official references.
IRS Publication 969 covers HSAs and other tax-favored health plans. General information, not legal or tax advice.
Explaining accounts at enrollment?
We cover HSAs, FSAs and HRAs in live virtual, group and one-on-one sessions, at no extra fee for client teams.