Archer MSA
From SmartMedicalConsumer Wiki
An Archer MSA is a tax-exempt trust or custodial account that you set up with a U.S. financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses.
For more information, see IRS publication 969 (2008) "Health Savings Accounts and Other Tax-Favored Health Plans"
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What are the benefits of an Archer MSA?
You may enjoy several benefits from having an Archer MSA.
- You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR.
- The interest or other earnings on the assets in your Archer MSA are tax free.
- Distributions may be tax free if you pay qualified medical expenses. See Qualified medical expenses, later.
- The contributions remain in your Archer MSA from year to year until you use them.
- An Archer MSA is “portable” so it stays with you if you change employers or leave the work force.
Qualifying for an Archer MSA
To qualify for an Archer MSA, you must be either of the following.
- An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse).
- A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP.
What's new in 2008
Expiration of Archer MSAs. After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless:
1-You were an active participant for any taxable year ending before January 1, 2008, or 2-You become active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan of an Archer MSA participating employer.
Limits increased.For Archer MSA purposes, the minimum annual deductible of a high deductible health plan increased to $1,950 ($3,850 for family coverage). The maximum annual deductible of a high deductible health plan increased to $2,900 ($5,800 for family coverage). The maximum out-of-pocket expenses limit increased to $3,850 ($7,050 for family coverage).
For more information, see IRS publication 969 (2008) "Health Savings Accounts and Other Tax-Favored Health Plans"
What's new in 2009
For Archer MSA purposes for 2009, the minimum annual deductible of a high deductible health plan increases to $2,000 ($4,000 for family coverage). The maximum annual deductible of a high deductible health plan increases to $3,000 ($6,050 for family coverage). The maximum out-of-pocket expenses limit increases to $4,000 ($7,350 for family coverage).
