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Medical Expense Accounts When navigating the world of medical expense accounts, there is a lot of confusing information. FSAs, MSAs, and HSAs - what are the differences? Which one is better? Which one are you eligible for? Although these medical expense accounts all work in a similar fashion, there are important differences to understand before making a choice. Sorting through Medical Expense Accounts FSAs, also known as flexible spending accounts, are IRS-approved, tax-exempt accounts that can be used to pay for a variety of medical expenses. At the beginning of the year, individuals or heads of household decide how much they wish to save (the minimum and maximum are typically set by the employer). This amount is deducted throughout the year. Nevertheless, it is important to keep in mind that any money left over at the end of the fiscal year is forfeited to the government. MSAs, medical savings accounts, are similar. One of the main differences lies in the fact that they are only open to self-employed individuals and small businesses. MSAs require carrying a high deductible health plan to be eligible. Although less money can be put into this type of account, any excess rolls over to the next year for future medical expenses. HSAs, health savings accounts, are probably the most popular of all medical expense accounts because of their versatility. They offer a higher ceiling, money left over is not forfeited and anyone can apply for one. Much like MSAs, a high deductible plan must be carried to be eligible. Nevertheless, the money saved in a take care® HSA can be accessed via check or debit card for a wide selection of medical expenses. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Healthcare Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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