DEFINITION of 'Medical Savings Account - MSA'

A medical plan combining high-deductible medical insurance protection with a tax-deferred savings account that can be offered by employers as part of a benefits package. Medical savings accounts are designed to help participants pay for medical and healthcare expenses by allowing them to save for those expenses in a tax-sheltered environment. Participants pay healthcare expenses from this account up to the amount of the insurance deductible.

Also known as "Archer medical savings accounts" or "Archer MSAs."

BREAKING DOWN 'Medical Savings Account - MSA'

Archer MSAs cannot be established after 2007 and have been replaced by health savings accounts (HSAs), which were introduced in 2003. However, MSAs already established can continue to accept new contributions. MSAs can also be rolled over into HSAs, but no new contributions can be made once the account holder becomes eligible for Medicare.

RELATED TERMS
  1. Archer MSA

    A savings account that earns tax deductible interest for medical ...
  2. IRS Publication 502: Medical And ...

    A document published by the Internal Revenue Service detailing ...
  3. Health Savings Account - HSA

    An account created for individuals who are covered under high-deductible ...
  4. Blanket Medical Expense

    An insurance policy which provides coverage for all medical expenses ...
  5. Medical Underwriting

    The process of assessing the risk associated with providing health ...
  6. Savings Account

    A deposit account held at a bank or other financial institution ...
Related Articles
  1. Insurance

    Health-y Savings Accounts

    HSAs can provide a new way to save for retirement and medical expenses.
  2. Financial Advisor

    Why Clients Should Save More for Medical Expenses

    Here's how to approach clients to get them to save more toward medical expenses in retirement, which continue to grow.
  3. Financial Advisor

    Why Advisors Should Offer HSA Advice

    As HSAs continue to gain steam, advisors need to incorporate them into their practices in order to round out their product offerings.
  4. Insurance

    How To Avoid Medical Debt

    Find out what you can do to avoid a financial meltdown when there's a medical emergency.
  5. Retirement

    Planning for Healthcare Costs in Retirement

    Healthcare often is the highest cost during retirement. Here's how to plan for and possibly buck that trend.
  6. Retirement

    Planning for Healthcare Costs in Retirement

    Healthcare often is the highest cost during retirement. Here's how to plan for and possibly buck that trend.
  7. Insurance

    Do This If Health Insurance Doesn’t Cover Your Bills

    Health insurance doesn't pay enough to help the millions of consumers who are drowning in medical debt. Are there any other options to soften the blow?
  8. Insurance

    5 Alternatives to Traditional Health Insurance

    Discover five of the most popular alternatives to traditional health insurance plans, alternatives that are increasingly popular as health insurance costs rise.
  9. Managing Wealth

    This Is Why HSAs Appeal to High-Income Earners

    Health Savings Accounts are a good deal. But they're a better deal for some than for others. We parse how the plans work – and who benefits the most.
  10. Insurance

    Health Savings Accounts: What You Need to Know

    The the popularity of Health Savings Accounts is on the rise. Here's how they work.
RELATED FAQS
  1. What are catch-up contributions for Health Savings Accounts (HSAs)?

    Learn about Health Savings Accounts (HSAs) and how an eligible individual of age 55 or older can make additional catch-up ... Read Answer >>
  2. What are the requirements to be able to contribute to an HSA?

    Health Savings Accounts (HSA) can be used by individuals covered by a high-deductible health plan to save for health care ... Read Answer >>
  3. How is the deductible I paid for my insurance claim treated for tax purposes?

    Find out how your health insurance deductible is treated for tax purposes and under what conditions you may be able to deduct ... Read Answer >>
  4. Can a Flexible Spending Account (FSA) be used for dental procedures?

    Learn about Flexible Spending Accounts (FSAs) and which medical and dental expenses are considered qualified medical expenses ... Read Answer >>
  5. What economic factors affect savings account rates?

    Find out how supply, demand and central bank policy all affect savings account rates offered by banks for extra deposits ... Read Answer >>
  6. How is a savings account taxed?

    Read about the taxation of interest income on personal savings accounts, how the tax is calculated, and how to report savings ... Read Answer >>
Hot Definitions
  1. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  2. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  3. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  4. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  5. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  6. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
Trading Center