Merritt Personal Lines Manual: MSAs versus Cafeteria Plans

This is the big difference between an MSA and a flexible-spending health account, which some companies already offer. Flexible-spending health accounts also use pretax dollars for medical expenses not covered by insurance. However, the unused balance in a flexible spending account is forfeited at year end. MSA funds can accumulate over time.

This is why MSA policies are being marketed as investment tools -- since the leftover money can be rolled over year after year and collect interest. Leftover money can be used for future health care expenses or be invested in stocks, bonds and money market accounts.