Archer Medical Savings Account (MSA)
A predecessor to HSAs, available only to self-employed individuals and small business employees with high-deductible plans.
What is Archer Medical Savings Account (MSA)?
An Archer Medical Savings Account (MSA) is a tax-advantaged account similar to an HSA, but with more restrictive eligibility requirements. MSAs were created in 1996 as a pilot program and are now largely obsolete since HSAs became available in 2003.
Archer MSAs are only available to self-employed individuals and employees of small businesses (50 or fewer employees) who have a high-deductible health plan. No new Archer MSAs can be opened, but existing accounts can still be maintained and contributed to if the owner remains eligible.
The tax treatment is similar to HSAs: contributions are tax-deductible, growth is tax-free, and qualified medical expense withdrawals are tax-free. If you have an Archer MSA, you can roll it over into an HSA tax-free.
Frequently Asked Questions
Should I open an Archer MSA?
No. Archer MSAs are no longer available to new participants. If you're eligible for a tax-advantaged health account, open an HSA instead.
Can I convert my Archer MSA to an HSA?
Yes. You can roll over an Archer MSA into an HSA tax-free and penalty-free.
Related Terms
Health Savings Account (HSA)
A tax-advantaged savings account for people with high-deductible health plans to pay for qualified medical expenses.
High-Deductible Health Plan (HDHP)
A health insurance plan with a higher deductible and lower premiums that qualifies you to open an HSA.
Self-Employed HSA
HSA contributions for self-employed individuals, who get the same benefits but handle contributions differently.
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