Your Health, Your Money, Your Doctor ®
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Your Health, Your Money, Your Doctor ® |
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Key Details of the Medical Savings Account Law 1. Who may set up a Medical Savings Account? A self employed person may set up a Tax Exempt MSA, or an employer in a small business may set up a Non-Qualified MSA . In Florida this does not qualify under the Florida Group Laws and is Health Underwritten. In the case of the employee, either the employer, the employee, or both, may make a contribution to the Non-Qualified Medical Savings Account during any given year. It is not necessary that the Medical Savings Account Plan be for all employees. The employer may offer this as an option, which could be taken by 3 employees, or 5 employees, or 10 employees. 2. What qualifies a health insurance plan to be paired with a Medical Savings Account? It must be a high-deductible, comprehensive, major medical insurance policy. The law requires annual deductibles of between $1,650 and $2,500 for individuals and between $3,300 and $4,950 for families. ("Families" include husband and wife coverage, parent and child, or family coverage.) 3. Will a traditional high-deductible policy qualify? My policy has a $2,000 deductible per person. For my wife and me that would be $4,000. No, that will not qualify. The law is specific and clear. For a family (2 or more persons), the deductible must be at least $3,300 for the family and not more than $4,950. The traditional high-deductible policy does not fall within these requirements. Most traditional plans also have out-of-pocket costs that exceed those allowed under the MSA law. 4. Is it possible to only have a Medical Savings Account without the qualifying high-deductible health insurance? No. 5. How much can be contributed to a Tax Exempt Medical Savings Account each year? A family may contribute up to 75% of the deductible amount. For example, if a family purchases a $4,950 deductible policy, the maximum the family can contribute each and every year is $3,712.50 ($4,950 x 75%). An individual may contribute up to 65% of the deductible amount. So, if a single taxpayer selects a plan with a $2,500 deductible, the maximum amount that can be contributed every year to the savings account is $1,625 ($2,500 x 65%). 6. If a Medical Savings Account is set up in January but the qualifying high-deductible coverage is not purchased until April, can the tax break (Self-Employed Only) be taken for the entire year? No. The Medical Saving Account tax break does not apply for the months it is not paired with a qualified high-deductible insurance plan. 7. How do I set up a Medical Savings Account? Easy. When you or your employer purchase a high-deductible health insurance policy from Medical Savings Insurance, we will automatically set up your account. 8. How do I get money out of my account if I need to pay a medical bill? We provide you with a Medical Savings Account voucher. The voucher is designed to function as an envelope. Fill in the voucher, enclose a copy of the bill, put both in the envelope and send it to us. We will pay the amount from your account and send you a check.
How Medical Savings Account Money Can Be Used
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