Hassle-Free Health Coverage: Medical Savings Account

A medical savings account (MSA) is an employer-funded account linked to a high deductible medical indemnity plan. Usually, your employer raises the existing plan deductible (usually by 300 percent to 400 percent) and in turn returns a portion of the premium savings to you as contributions to the medical savings account. You can use these contributions to pay for health care expenses throughout the year, and at the end of the year, you may withdraw whatever remains in the account as (taxable) cash.