Employer benefit accounts in Washington

Choose the account that fits your benefits strategy.

HRAs, HSAs, FSAs and pre-tax payroll plans solve different problems. Start with what you want to fund, who should control the money and how the account fits your health coverage.

Explore HRA strategies Get help comparing

A practical starting point

Choose the account around the job

Four different tools for employer benefits
Tool	Who funds it?	What it can do	What to check
HRA	Who funds it?Employer only	What it can doReimburse expenses allowed by the specific HRA, which may include insurance premiums.	What to checkHRA type, eligible employees, covered expenses and reimbursement limits.
HSA	Who funds it?Employer, eligible employee or both	What it can doBuild employee-owned savings for qualified medical expenses.	What to checkHSA contribution eligibility and the combined annual contribution limit.
Health FSA	Who funds it?Employee salary reductions; employer contributions may also be available	What it can doReimburse eligible health expenses under the employer’s plan.	What to checkAnnual elections, claim deadlines and the plan’s permitted carryover or grace period.
Section 125 plan	Who funds it?Supports permitted employee pre-tax elections	What it can doAllow eligible benefits, such as employee group-premium contributions, through payroll.	What to checkWritten plan terms, election rules, testing and payroll setup.

Employer-funded reimbursement

An HRA is a category, not one benefit

Individual coverage

ICHRA

For employers considering an allowance toward qualifying individual insurance or Medicare. Employees select coverage; the employer establishes the reimbursement benefit.

Explore ICHRA

Eligible small employers

QSEHRA

For eligible employers that are not applicable large employers and do not offer a group health plan. Annual federal benefit limits apply.

Compare QSEHRA and ICHRA

Alongside group coverage

Integrated HRA or EBHRA

An integrated HRA can complement group medical coverage. An EBHRA is a separate, limited design that requires a traditional group-plan offer.

Understand EBHRA

Employee accounts

Explain ownership and deadlines up front

Health Savings Account

Savings employees keep

An HSA belongs to the employee and its balance carries forward. Contributions require HSA-eligible coverage and satisfaction of the other eligibility rules. Qualified medical withdrawals are generally federally tax-free; nonqualified withdrawals can be taxable and may incur an additional tax.

Health Flexible Spending Account

An annual spending election

A health FSA helps employees plan for eligible out-of-pocket expenses. Unused funds generally follow use-it-or-lose-it rules, subject to a permitted carryover or grace period if the plan adopts one. A dependent care FSA is a separate benefit with different rules.

Check HSA compatibility before combining accounts. A general-purpose health FSA or HRA can make an employee ineligible to contribute to an HSA. Limited-purpose, post-deductible or premium-only arrangements may work when properly designed. Medicare enrollment and other coverage also matter.

Section 125 & payroll

Pre-tax treatment starts with the right setup

A Section 125 cafeteria plan is a written employer plan governing permitted benefit elections. It can allow eligible employees to pay their share of group premiums before applicable taxes. Simply labeling a deduction “pre-tax” does not establish the plan.

Match payroll deductions to current written plan documents and employee elections.
Review eligibility, permitted election changes and applicable nondiscrimination testing.
Keep HRA reimbursements separate from employee salary reductions: employees do not contribute to an HRA.

Buying through the exchange? The employee’s remaining premium for exchange coverage cannot be paid through pre-tax Section 125 salary reductions. An ICHRA may reimburse eligible exchange premiums; the payroll rule is a separate issue.

Put the pieces together

Three questions for your benefits review

What are you trying to improve?

Separate premium affordability, deductible support and employee savings. Each may call for a different account.

How will employees use it?

Review enrollment, reimbursement timing, documentation and the help employees will need.

What must work behind the scenes?

Coordinate the administrator, payroll, plan documents and insurance effective dates before announcing the benefit.

Common questions

Avoid surprises at enrollment

Do unused HRA dollars belong to the employee?

An HRA is an employer reimbursement arrangement, not an employee-owned savings account. Carryover, forfeiture and any post-employment reimbursement rights depend on the plan. Unused allowances are not automatically payable as cash.

Can an HRA replace our group medical plan?

An ICHRA or, for an eligible small employer, a QSEHRA may be an alternative. An EBHRA cannot replace the required traditional group-plan offer. Compare employee premiums, networks and tax-credit effects before changing coverage.

Which option saves the most?

There is no universal winner. Compare total employer costs, employee contributions, expected out-of-pocket exposure, administration and the value of the coverage available where employees live.

Keep exploring

Employer benefits resources

HRA strategy guide ICHRA & individual coverage Excepted benefit HRA HRA, HSA & pre-tax plans Employee benefits Business services COBRA administration ACA compliance Benefits enrollment Employee education Washington Healthplanfinder guide from Washington Insurance Brokers

Benefit Experts

Build a benefit your business can sustain.

Let’s compare the options for your team

Tell us your employee count, locations, current benefits and budget goals. We can help compare insurance options and support employees shopping for individual or family coverage through Washington Healthplanfinder.

Talk with us about an HRA Request a benefits quote Call 206.556.2993

Information reviewed September 19, 2026. Eligibility, reimbursement rules and tax treatment depend on the arrangement and individual circumstances. Plan documents control the benefit; coordinate implementation with your HRA administrator and tax or legal advisers. Please use the contact form for general questions, not medical records or employee Social Security numbers.

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