Group Medical Insurance - Other Health Savings Accounts
Archer Medical Savings Accounts (MSAs)
MSAs are similar to an HSA in that they are tax-deferred. These accounts enable participants in high deductible health plans (HDHP) to save money toward medical expenses. Eligible candidates are small employers with fifty or fewer employees during either of the previous 2 calendar years.
If an employer is a growing company, the company can still meet the MSA eligibility if there were 50 or fewer employees when the plan was initiated, made a deductible contribution during the last year the company had 50 or fewer employees, and if the company had an average of 200 or less employees each year after 1996.
An employer or employee may make contributions to this sort of account, but not both. Contributions are capped at 65% of the annual deductible for individuals and 75% for families. Non-qualified withdrawals are subject to a 15% penalty until age 65. Such accounts are portable. As of January 1, 2004, MSAs may no longer be established.
In 2007, the annual deductible and maximum out-of-pocket expenses for HDHPs are:
- Individual - $1,900 minimum and $2,850 maximum annual deductible, $3,750 maximum annual out-of-pocket expenses.
- Family - $3,750 minimum and $5,650 maximum annual deductible, $6,900 maximum annual out-of-pocket expenses.
Health Reimbursement Arrangements (HRAs)
HRAs are designed to reimburse employees for qualified medical expenses. The employer funds the plan and there are no contribution limits to this sort of account. Portability is at the employer's discretion.
Non-qualified withdrawals are taxed at 15%. Qualified withdrawals include amounts paid for health insurance premiums, long-term care coverage, and amounts not covered under another health plan.