Please Select AutoHealthLife

What Are Archer Medical Savings Accounts For A Health Insurance Policy?

By Cathy Wilson Posted in Health Insurance News

An Archer Medical Savings Account, or MSA, is a investment account with tax-deferment much like an IRA. It is used along with a qualifying high deductible health plan, or HDHP. MSAs are typically used for medical expenses not covered by your high deductible health plan. It helps you meet your deductible with tax-deferred money, which means that it is not taxed. Either you or your employer can contribute to this account but not within the same tax year.

High Deductible Health Plan

Employers are trying to save money wherever they can these days to prevent job loss. One of the harder hit areas is the health insurance many employers provide for their employees. Many companies are overhauling their health care benefits to employees in an effort to divert some of the money to other parts of the business. One of the plans that businesses are turning to is a high deductible health plan.

A high deductible health plan is a health insurance plan with a high deductible but lower monthly premiums. So while employees don’t pay that much more monthly they are hit when it comes time to pay out of pocket. Many self-employed Americans are turning to this type of plan in an effort to obtain medical insurance at a low cost.

Who Would This Work For

You can only get an Archer Medical Savings Account if you are currently enrolled in a qualifying high deductible health plan. This type of plan is ideal for someone who is young and in great health with no children. For everyone else it can be a serious financial gamble because of the high deductible that must be met before the insurance will kick in and start covering some of the cost.

If this is the only type of insurance you can get, then try to save enough money to meet the deductible in the MSA. This will ensure that you are saving the money tax free rather than paying it right out of your checking account after it has already been taxed.

What Happens To The Money

If you do not use all of the money in your MSA by the end of the calender year it will simply roll over into the next year. If you try to access the money for expenses other then medical expenses then the money will be taxed and a expenditure fee will also accompany it. You can control how much or how little money you deposit into an MSA so plan wisely.

Related posts:

1. Do Health Savings Accounts Really Save Money?
2. What Is A Health Reimbursement Arrangement For Health Insurance?
3. What Is A Health Care Savings Account?
4. What Is A Health Savings Account For Health Insurance Coverage?
5. How Do You Start A Health Care Savings Account?