What advantages do HSAs have over Medical Savings Accounts (MSAs)?
HSAs are portable. HSA-eligible high-deductible health plans have lower deductible requirements and higher out-of-pocket limits than MSAs, making the accounts more flexible and accessible than MSAs. HSAs, unlike MSAs, may be offered as part of an employer’s “cafeteria” plan. HSA tax-deductible contribution limits are greater than those for MSAs. An employer and employee are both permitted to contribute to an HSA in the same year (unlike MSAs where either the employer or employee may make contributions in the same year, but not both). “Catch-up” contributions are allowed for HSAs for people between the ages of 55 and 65 (starting at $500 per year in 2004).
