Gen7 Are Health Savings Accounts better than Medical Savings Accounts?
Yes, the benefits of HSAs exceed the benefits of MSAs in every aspect where there are differences between these two types of health plans. Some of the advantages are: 1) HSAs are available to employees of larger businesses and unemployed people whereas MSAs were available only to small businesses, 2) HSAs may be funded by a combination of employer and employee contributions, 3) HSAs offer larger maximum tax-deductions, 3) HSAs offer a wider range of insurance options, 4) HSAs offer more liberal withdrawal or rollover options, 5) HSAs are permanent and portable, whereas MSAs were a limited term program with limited use of funds other than the stated purpose. Medical Savings Accounts continue to be available through 2008 (as allowed under the Tax Relief and Health Care Act of 2006), but we expect that there will be little interest in these older plans.
