There are several types of plans that fall under this topic. Although the names are different they operate in a similar manner. These cost sharing plans are designed to hold down the cost of health insurance premiums by providing an incentive to live a healthy lifestyle, promote consumerism and reward prudent purchasers of health care. These plans are a combination of offering a qualified high deductible medical plan along with contributing to a health care savings account that has tax advantages to the employee.

H S A is a two component health plan consisting of a tax-deductible, high deductible health insurance plan (HDHP) and a tax-free claims expense reimbursement and tax-deferred savings plan. Reimbursements from the saving account for those expenses deemed eligible, are 100% tax free, while all other withdrawals are taxable as ordinary income with an added penalty when taken prior to age of 65. This plan is available to self-employed individuals, individuals and groups. Contributions to the account may be made by the employer, its employees and as an individual. This plan is portable, which means you as an employee can take it with you if and when you leave an employer. This plan does not offer co-pays but discounts and price adjustments (when in network) do apply.

H R A is not to be confused with the H S A. While it performs somewhat similar to the MSA & HSA, there are some very noticeable differences. First, the employer is the only one who can make contributions to the account. Second, the employer owns the account; once you leave that employer you no longer have the account. Third, the employer determines whether to pay after age 65.