Unlike QSEHRA or a group plan, HSAs and FSAs aren't alternatives to ICHRA — they're accounts that can run alongside it. But the rules for combining them are specific, and getting them wrong can cost an employee their HSA eligibility.
| Feature | ICHRA | HSA | FSA |
|---|---|---|---|
| Who funds it | Employer only | Employee and/or employer | Employee (pre-tax payroll), employer optional |
| Covers insurance premiums | Yes | No | No |
| Covers other medical expenses | Optional, employer's choice | Yes | Yes |
| Requires a specific health plan | Individual market or Medicare enrollment | Must be enrolled in an HDHP | No specific plan requirement |
| Annual contribution limit | None (employer sets it) | IRS annual limit ($4,300 self-only / $8,550 family for 2025) | IRS annual limit ($3,400 for 2026) |
| Ownership | Employer's plan; funds don't follow employee by default | Employee-owned; stays with them for life | Employer's plan; typically forfeited if unused |
HSA eligibility requires that an employee not have other health coverage that pays for expenses before the HDHP deductible is met. This creates a specific fork for ICHRA design:
If the ICHRA only reimburses individual health insurance premiums — not other out-of-pocket medical costs — it doesn't interfere with HSA eligibility. An employee can have both, as long as they're enrolled in an HSA-qualifying HDHP on the individual market.
If the ICHRA reimburses other qualified medical expenses beyond premiums, it counts as disqualifying coverage for HSA purposes — the employee loses HSA eligibility for any month they're covered by that broader ICHRA design.
Employers can offer a choice within the same class — an HSA-compatible (premium-only) ICHRA option alongside a broader one — as long as both are offered to everyone in that class on the same terms.
Unlike the HSA interaction, combining ICHRA with a Health FSA is more straightforward. An employer can offer both, usually through a Section 125 cafeteria plan for the FSA piece. The main rule to watch: an employee can't be reimbursed for the same specific expense from both accounts — each dollar of a qualifying expense gets claimed once, from one account.
Yes, but only if the ICHRA is limited to reimbursing premiums only. If it also reimburses other out-of-pocket medical expenses, it disqualifies the employee from contributing to an HSA, since HSA eligibility requires that the employee not have other non-HDHP-compatible coverage.
Yes — an employer can offer both, typically through a Section 125 cafeteria plan. Employees just can't seek reimbursement for the same expense from both accounts (no "double dipping"); each qualifying expense can only be reimbursed once.
That depends on how the employer designs the plan. Unlike an HSA, which is owned by the employee and stays with them regardless of employment, ICHRA funds stay with the employer's plan — rollover from month to month or year to year is optional and set by the employer, not guaranteed by default.