First, please understand the difference. Many chiropractic patients do not know what they have, so it is important that you understand these key terms.

Traditional Health Savings Account (HSA)

An HSA is a savings account set up to be used for medical expenses and nothing else. Funds directed to the HSA are pretax dollars, thus reducing taxable income, and HSA’s offer interest on the balance. The medical expenses and HSA can be used for include optical, insurance deductions, dental, chiropractic and some over-the-counter medications. Individuals who are covered by high deductible health plan (HDHP) are eligible to open an HSA.

Archer Medical Savings Account (MSA)

An Archer MSA is a tax-favored savings account designed to help you pay for qualified medical expenses if you are an employee of a small employer or a self-employed individual participating in a high-deductible health plan. Archer MSA assets may be rolled over or transferred to an HSA.

Health Flexible Spending Account (FSA)

A health FSA is an arrangement that allows employees to be reimbursed for medical expenses. Health FSAs are usually funded through voluntary salary reduction agreements with the employer. No employment or federal income taxes are deducted from contributions made to a health FSA. In general, balances in a health FSA at the end of a plan year cannot be carried over to the next year. For more information on health FSAs see IRS Publication 969,

Health Reimbursement Arrangement (HRA)

An HRA is an arrangement similar to a health FSA; however, an HRA must be solely funded by an employer. The contribution cannot be paid through a voluntary salary reduction agreement on the part of an employee. Employees are reimbursed tax free for qualified medical expenses up to the maximum dollar amount for a coverage period. Balances in an HRA at the end of a plan year can generally be carried over to the next year. For more information on health HRAs see IRS Publication 969,

Key Differences

The funds contributed to an HRA account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds.

Billing Considerations for the Chiropractic Office

All of the above plans qualify for chiropractic reimbursement. The method of obtaining reimbursement varies by the plan type. Some plans will state that they do not pay for prepaid services. This is not accurate, as they will prepay for three years of orthodontic care (braces) and similar “pay upfront” services.

A FSA, or flex-spend account, only reimburses the patient for health care costs they have already paid. The patient must “use or lose” the money that has been put into their FSA each year.

An HSA plan is directed by the patient. They will have a card, similar to a credit card (and processed exactly like a credit card, not a debit card) that pulls from their HSA. This can be used for deductibles, co-payments and prepayments on discount plans.

An HRA plan is maintained by the employer and you must bill directly to the employer (in most cases) for reimbursement.

To avoid confusion for the patient and their HRA or FSA plan, the clinic must provide the patient a receipt or invoice showing that the patient has paid for the service. When a patient begins a treatment plan in your office, and you provide a discount for payment up front for the plan of care, the invoice should show that the patient paid for XX visits in your office. It should not indicate that the patient “pre-paid” for  a care plan as this will often confuse the plan and result in your patient not being fairly reimbursed.

Questions can usually be directed to the company’s human resource department.

Chiropractic offices should promote the fact that they can provide a “Discount for Using Your HSA / Flex Spend Account”. If you have established payment at time of service discounts, or prepayment discounts, encourage patients to use these by promoting the savings they can get. People with these plans are well aware of how quickly they can burn through their heath care dollars and welcome an opportunity to save.