Medical Savings Accounts

Medical Savings Accounts (MSA's) are an excellent way to help fund medical expenses. The tax-favored treatment of Medical Savings Accounts was established by the Health Insurance Portability and Accountability Act of 1996. Employer groups of 50 or fewer employees are allowed to use tax-advantaged MSA's in conjunction with high deductible insurance plans. An MSA is tax deductible to the employer or employees depending on who makes the contribution. Increases to the account accumulate on a tax deferred basis. The account earns interest and options are available to place account funds in a mutual fund. Penalties are assessed for non-qualified withdrawals prior to the age of Medicare eligibility.

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