With open enrollment just around the corner, now is the perfect time for brokers to consider whether to stay with their current administrator or explore new possibilities. By introducing a range of consumer-driven health plans, such as FSAs, HSAs, HRAs, DCAPs, Commuter Benefits, and Lifestyle Accounts, you can help clients save money, stay compliant, and boost employee satisfaction. These accounts deliver flexibility, tax advantages, and efficiency that both employers and their employees need as the calendar resets.
FSA (Flexible Spending Account)
An account employees can use to set aside pre-tax dollars for eligible healthcare expenses like copays, prescriptions, and medical supplies. Employers may also contribute to these plans, which will boost participation. The more employees defer on a pre-tax basis, the more employees and employers save on taxes.
A savings account paired with a qualified high-deductible health plan (HDHP) designed to cover current and future healthcare costs with great tax advantages. These accounts are ideal for employees saving for long-term healthcare costs or seeking retirement-ready healthcare savings.
HRA (Health Reimbursement Arrangement)
An employer-funded account that reimburses employees for eligible healthcare expenses defined by the employer. These accounts are best for employers looking to control costs while offering targeted healthcare support.
DCAP (Dependent Care Assistance Program)
A type of flexible spending account for childcare or dependent care expenses, such as daycare, after-school programs, or spouse/parent care.
Pre-tax accounts allow employees to pay for public transit or parking with pre-tax dollars. This type of benefit is best suited for companies with a commuting workforce or those where transit costs are significant.
Flexible, post-tax benefit allowing reimbursement for wellness or lifestyle-related expenses, such as fitness memberships, mental health apps, or personal development. These types of accounts are less regulated than FSAs and HSAs and are beneficial for covering non-medical well-being needs and enhancing the overall benefits package of an employer to attract talent.
Quick Comparison Table
Account Type |
Ownership |
Funding Source |
Tax Benefits |
Rollover & Portability |
Eligibility |
FSA |
Employer
|
Primarily employee, but the employer can also provide a contribution
|
Pre-tax contributions (lowers taxable income) up to $3,300 for 2025
|
Limited rollover (employer-defined)
|
Available to employees if offered by employer
|
HSA |
Employee
|
Employee, employer, family
|
Triple tax advantage—contributions, growth, and withdrawals for medical expenses are tax-free
Contributions limited to $4,400 for individuals and $8,750 Family (2026)
|
Full rollover & portable if employee changes jobs
|
Must be enrolled in a qualified HDHP
|
HRA |
Employer
|
Employer only
|
Tax-free reimbursements for qualified medical expenses
|
Employer-defined rollover
|
Determined by employer plan design
|
DCAP |
Employer
|
Primarily employee, but employer can also provide a contribution
|
Pre-tax contributions up to IRS limits ($7,500 effective 2026)
|
Non-portable
|
Employees with eligible dependent care costs
|
Commuter Benefits |
Employer
|
Employee
|
Pre-tax contributions up to IRS monthly limit ($325 for 2025)
|
Rolls over but is not portable if employee changes jobs
|
Employees with qualified commuting or parking expenses
|
Lifestyle Accounts (LSA) |
Employer
|
Employer only
|
Varies by design
|
Flexible
|
Available to employees if offered by employer
|
FSAs, HSAs, HRAs, DCAPs, Commuter Benefits, and Lifestyle Accounts each fill a different role in helping employers support their workforce. Together, they create a toolkit that balances cost savings, flexibility, and employee satisfaction. Brokers who guide clients toward the right mix of accounts not only deliver immediate value but also build stronger, longer-lasting relationships.
At Medcom, we simplify the administration of these accounts, allowing employers to focus on their people, not the paperwork. With our expertise and hands-on support, brokers can feel confident knowing their clients are backed by a trusted partner every step of the way. Contact us today to get started!
