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FSAs and HRAs explained

PacificSource Administrators, Inc. offers the following plan types, but availability is based on what your employer chooses to offer.

Flexible Spending Accounts (FSA)

There are two main types of FSAs. One for healthcare expenses and one for childcare or elder care expenses.

Common features of both FSA types:

  • Allows you to pay for eligible expenses with your own pretax dollars
  • You can choose your annual contribution amount
  • Reimbursements are issued via direct deposit or checks

General Purpose Health FSA

  • Entire annual contribution is available on the first day of the plan year
  • You must be eligible for your group-sponsored insurance
  • Can’t be combined with a Health Savings Account (HSA)

Eligible expenses include:

  • Deductibles
  • Coinsurance
  • Copayments
  • Dental care
  • Vision care
  • Over-the-counter medicine
  • Prescriptions

For details, download a list of eligible expenses

Dependent Care FSA

  • For childcare, elder care, or other dependent care expenses while you (and your spouse) are working
  • Funds become available when payroll deductions are received
  • Usually provides a greater tax savings than the IRS Standard Dependent Care Tax Credit
  • You may not claim the same expenses on your FSA as you do on your IRS tax credit

If your claim amount exceeds your balance:

  • You’ll be reimbursed up to the amount available in your FSA account
  • The remaining expense will be reimbursed when you contribute additional funds to cover it

To reimburse recurring expenses:

  • Once you set it up the first time, reimbursements will occur automatically
  • You can adjust the dollar amount of recurring reimbursements during the year

Want to know more about FSAs?

Download the FSA Participant Guide

Health Reimbursement Arrangements (HRA)

  • Your employer funds an account, with no contribution from you
  • Get reimbursed for health expenses incurred by you or your family (for accounts that include your family)

Eligible expenses

Some companies allow the same expenses that are allowed under a Health FSA, while others limit to specific expenses such as insurance deductible. Your Human Resources department should be able to let you know what your plan allows.

Carry over from year to year

Your employer sets the rules on if and how much of your HRA balance carries over each year. Many employers have an annual carry over maximum. Your employer may also determine a cap on your total HRA account balance.

Other services

Your employer may offer:

Premium only plans

Pay for your insurance premiums with pretax payroll deductions.

  • Includes medical, dental, and vision premiums for you and your dependents
  • Up to a 30 percent savings, depending on your tax rate
  • Automatically adjusts payroll deduction if your premium changes

Transportation benefits

Pay for work-related commuting expenses with pretax payroll deductions.

  • Use for parking your vehicle at or near your work or at a park-and-ride
  • Works with tickets or passes for buses, trains, ferries, or subways to and from work
  • Funds can carry over from year to year
     

Are you an employer or producer? Learn about the administrative services offered by PacificSource Administrators, Inc.