Medical Savings Accounts
Medical Savings Accounts. MSAs are tax-efficient savings accounts designed to encourage savings to cover health expenses - in particular the deductible (co-payment element) of Catastrophic Health Insurance. The Health Insurance Portability and Accountability Act of 1996 established a five-year MSA demonstration project for employees of small firms and the self-employed. MSAs under HIPAA provided federal tax deductions for contributions to multiyear savings accounts established for medical purposes. Victoria Craig Bunce believes that these accounts were poorly designed and hampered by regulations imposed under the HIPAA. She argues that these regulations should be relaxed to allow MSAs to develop.
By Cato Institute, US.