What Does Medical Savings Accounts Mean?
A medical savings account (MSA) is an account that money can be deposited into and then used to pay for healthcare expenses. Money stored in MSAs are exempt from taxation.
Medical savings accounts are often used as part of high deductible health insurance plans.
Insuranceopedia Explains Medical Savings Accounts
Medical savings accounts are often offered by employers as a part of a healthcare benefit package. Many people will use the money in their MSAs to pay for medical expenses until they have reached the full limit of their deductible for the policy period. After those funds have been depleted, the insurance company handles expenses until the policy limit.
The main benefit of medical savings accounts is that their tax-exempt status allows health insurance policyholders save money.