What is the meaning of Archer Medical Savings Account (MSA)?
An Archer MSA is very much like an IRA which is used along with a qualified high deductible health plan (HDHP). An MSA is basically used for saving medical expenses. It is tax advantaged arrangement. In this plan, earnings and deductible conditions are accepted. Contribution made to MSA is tax deductible whereas withdrawing funds is tax free at any time. If the withdrawal is made for non qualified medical expenses before retirement then it becomes the matter to income tax with 15% penalty. And after the age of 65, contribution made to non qualified medical expenses are the matter to tax as ordinary income and but not penalty. HSA offers great flexibility than MSA, so most of the people aware of this go for HSA.
