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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[edit] 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.
[edit] 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.
[edit] 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"
[edit] 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).
