Savings accounts designated for out-of-pocket medical expenses. In an MSA, employers and individuals are allowed to contribute to a savings account on a pre-tax basis and carry over the unused funds at the end of the year. One major difference between a Flexible Spending Account (FSA) and a Medical Savings Account is the ability under an MSA to carry over the unused funds for use in a future year, instead of losing unused funds at the end of the year. Most MSAs allow unused balances and earnings to accumulate. Unlike FSAs, most MSAs are combined with a high-deductible or catastrophic health insurance plan.
An MSA is a tax-advantaged account created for the benefit of an individual in a high-deductible health plan who is either employed by a small employer (fewer than 50 employees), or is self-employed. Contributions are deductible if made by an eligible individual, and are excludable from income and wages (for employment tax purposes) if made by an employer. Contributions may be made either by the employee or the employer, but not both. Earnings grow tax-free and distributions for qualified medical expenses under Section 213(d) are tax-free. Rollover of unused funds is permitted from year to year, and funds are portable. Under the new Medicare legislation MSA balances may be rolled over into HSAs as of 1/1/04.
This is a variation on flexible spending accounts (FSAs). Similar to IRAs, employees make tax-free contributions to these accounts, to be used for medical expenses. With FSAs, the money contributed must be used the same year, or else it is forfeited.
A tax-exempt account, similar to an Individual Retirement Account, that is used to pay for routine medical expenses. These are used to pay for health care not covered by insurance, including deductible and co-payments.
Now HSA's(see above).
These health insurance plans provide incentives for individuals to replace high premium, low-deductible policies with affordable, high deductible catastrophic coverage. Premiums for this coverage are lower and the savings may be used to fund a tax-preferred medical savings account from which you can pay on a pre-tax basis for qualified medical care and expenses, including annual deductibles and copayments.
Tax-deferred accounts that employees use to pay for out-of-pocket health care expenses. MSAs work in conjunction with traditional health insurance policies and allow employees to roll over funds from year to year. MSAs are available only to employees of small employers and are subject to certain other restrictions.
Money is set aside for medical expenses, and the beneficiary has total control over the use of that money - whether it be for procedures, transportation, etc. With MSA's, the definition of "medical provider" is broad: it includes dentists, chiropractors, acupuncturists, and many other allopathic and non-allopathic doctors and healers. An MSA has two parts: A health insurance policy with a high deductible. A tax-free saving's account, similar to an IRA that can be used to pay that deductible. MSA's are ideal for the self-employed and the small business owner, because they offer a way to get extra coverage while lowering tax liability.
An arrangement through which an employer or an employee (but not both) can put tax-preferred contributions into an account for the payment of health care deductibles under a high deductible health insurance plan.
A program that lets certain persons covered by high-deductible or catastrophic health plans make tax-deductible contributions to an account that can be used to pay medical expenses. Distributions are tax-free when used to pay certain un-reimbursed medical expenses.
Government-approved plans, designed to help small business owners, the self-employed, and those employed by small businesses, to save on medical insurance by purchasing a high deductible managed care plan, and saving for deductible expenses in a tax-exempt savings account, along the lines of an I.R.A.