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How does an MSA differ from an HSA?

SOLVEDby TurboTax196Updated December 20, 2021

An MSA (medical savings account) is similar to an HSA (health savings account) in that both require the account holder to be covered by a high-deductible health plan, or HDHP.

However, Archer MSAs differ from HSAs in a few key areas:

  • Archer MSAs are restricted to self-employed individuals and small businesses with fewer than 50 employees
  • Annual contributions to an MSA can be made by either the employer or by the account holder – not both
  • MSA annual contribution limits are determined by the HDHP's deductible and taxpayer's income

A Medicare MSA is a form of a HSA for medicare recipients. The medicare MSA plan deposits money into an MSA account available to the recipient to pay health care expenses. If you have distributions from the Medicare MSA, you'll report that on your taxes using Form 8853.

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