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Archer MSAs cannot be established after 2007 and have been replaced by health savings accounts (HSAs), which were introduced in 2003.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.

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RELATED FAQS
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    Health Savings Accounts (HSA) can be used by individuals covered by a high-deductible health plan to save for health care ... Read Answer >>
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    Find out how your health insurance deductible is treated for tax purposes and under what conditions you may be able to deduct ... Read Answer >>
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    Find out how supply, demand and central bank policy all affect savings account rates offered by banks for extra deposits ... Read Answer >>
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