Flexible Spending Accounts (FSA) - Cafeteria Plans A Cafeteria Plan is a Flexible Spending Account (FSA), described under Section 125 of the Internal Revenue Code. A Cafeteria Plan allows employees to pay certain qualified expenses (such as health insurance premiums) on a pre-tax basis, thereby reducing their total taxable income and increasing their take-home pay. Funds set aside in FSAs are not subject to Federal, State, or Social Security taxes.
Health Reimbursement Arrangement (HRA) A Health Reimbursement Arrangement (HRA) is a tax-advantaged health benefit that allows both employees and employers to save on the cost of healthcare. HRA plans are employer-funded medical reimbursement plans. HRAs are most commonly offered in conjunction with a High Deductible Health Plan.
Health Savings Account (HSA) a Health Savings Account (HSA) is a tax-advantaged way to pay for health care. The individual sets money aside each month in a specially designated health savings account to pay for eligible medical expenses. The health savings account is owned by the individual. Money earned in a Health Savings Account accumulates tax-deferred, and whatever is withdrawn for eligible medical expenses is also tax-free.
