The Health Insurance Portability and Accountability Act of 1996 provides for a new type of savings account, designed to help individual taxpayers meet unreimbursed medical expenses on a tax favored basis. This savings account, called a Medical Savings Account (MSA), is available only when used in conjunction with an employer sponsored, "high deductible" health insurance policy.
Initially, MSA accounts will be available on a test basis, for tax
years 1997 through 2000. Participation is limited nationally to no
more than 750,000 individuals, either self-employed, or employed by a business
with 50 or fewer employees. If the 750,000 limit is reached, the
IRS will announce a cutoff, after which no additional MSAs will be allowed.
Key Points about MSA's
This document was last modified on July 26, 1999
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