A Medical (MSA) is a tax-deductible savings account that can only be used for medical qualifying expenses. Certain companies will only allow you to obtain a MSA if you agree to a fixed deductible. A MSA is not to be confused with a Health Savings Account (HSA), which is the MSA's successor.
History of the MSA
Medical Savings Account (MSA) health insurance plans have been available to some Americans since 1997, and were created as a way to decrease the overall cost of health care.
Tax Advantages
All charges incurred to an MSA are tax-deductible.
Contributions
A maximum monthly amount is set by the issuing company. Rollovers from previous health savings accounts or flexible spending accounts are not allowed.
Used in Conjunction with an Existing Plan
MSAs are only allowed to be used in conjunction with an existing high-deductible health plan, often starting at $1,000.
Small Business or Self-Employment
The MSA is only offered to self-employed individuals or small businesses with less than 50 employees.
Legislation
As of December 31, 2007, the US Treasury did not extend the MSA program. Any existing MSAs are grandfathered into an HSA account.
Tags: Medical Savings, Medical Savings Account, Savings Account