Hi , I'm looking into Medical Savings Accounts and would like to have some opinions on this subject. If you do have one, what's your experience ?What are the pros and cons? Thank you in advance for your response. Angela.
Angela, Below is a link to the IRS website on the topic, not sure if you have already visited it. It seems to me that the biggest roadblock is just getting the MSA set up. My best friend is still waiting for his attorney to get back to him. His CPA and insurance broker had no idea which direction to proceed. The link makes it look like any institution that can issue IRAs can handle a MSA. However, I suspect you may have to do some searching since the withdrawals have to be reported to you and the IRS as MSA withdrawals. The real risk/downside that I see is to someone who is not healthy and under a decent prescription plan with their current insurance. In that situation it is always a must to get new coverage before canceling the old which can be hard/impossible if you are not healthy. The other thing would be paying a small co-pay for drugs vs the full retail price and using the MSA. The other thing is the money stays in the MSA until used. Which is no big deal I suppose, but if you threw 1800$ in an MSA and didn't get sick then the money rolls to the next year. http://www.irs.gov/formspubs/display/0,,i1=50&genericId=80188,00.html If you do get one funded I would like to know who/how you ended up getting it set up. Regards,
ive had a msa for 5 years now.its a great deal.you get to build up tax free savings with it.if you dont get sick you can spend the money eventualy.in my case i have a 3000 deductable ins plan and have built my msa account up to almost 7000.i use golden rule as the carrier. http://www.goldenrule.com/Main.shtml