Archer MSA

An Archer MSA is a Medical Savings Account that a taxpayer is allowed to put money into throughout the year for medical purposes and are tax deductible. You can make withdrawals that are tax free, but have to be used towards qualified medical expenses under a high deductible health plan. Withdrawals for any other purpose other than medical are taxed and may be subject to penalties. Most forms of medical care are covered under this account no matter if the expenses are billed through your insurance company or not. Some other forms of care that are covered most of the time are disability, dental and vision, and long-term. After the taxpayer has met their plan deductible, the high deductible health plan will pick up the left over medical expenses in that year. If the taxpayer has any money left in their account at the end of the year they can choose to roll it over to the next year or withdraw it and claim it as taxable income.

Some employers offer MSAs as an alternative health insurance for their workers. These accounts can be looked at as a good thing if you are the kind of person who doesn't need to go to the doctor a lot or don't get sick a lot. The MSAs act like IRAs because you take the money and put it into a savings account that yields interest for you. If you have a regular insurance coverage plan then you might waste the money that you have to contribute every month if you don't go to the doctor that often.