Florida MSA Plans
Medical Savings Accounts

Florida Medical Savings Accounts (MSA Plans) have been in existence since 1996. They permit the self-employed individual or small business an opportunity to use pre-tax money to pay for their medical expenses. The tax advantages and the lower cost of the Florida health insurance premiums, make Florida MSA plans an attractive Florida health insurance choice.

If you do not fund the savings account portion of the MSA plan, the benefits are marginal. The true savings come in when you use a Florida MSA plan to build up your tax-deferred account.

What is a Medical Savings Account?

A Medical Savings Account (MSA) is a trust or custodial account, and may be offered by insurance companies, banks, and organizations approved by the Internal Revenue Service (IRS) to administer IRAs. It is combined with a low-premium/ high-deductible insurance policy, designed for individuals or families in order to fund health care expenses and medical insurance. Participants are encouraged to invest the premium savings in a medical savings account by making tax-deductible contributions to the MSA. Medical expenses are paid out of the account until the deductible is reached. Unused monies in the account may be rolled over tax-free and may be invested to pay for future medical expenses and more general uses after retirement.

Who is eligible for a Florida MSA?

Individuals who are self employed including sole proprietors, or general partners. Businesses with 50 of fewer employees.

What Are the Benefits of an MSA

1. Value

You save more money with high deductible medical insurance. The first $1500 to $2500 of medical insurance benefits cost more in premiums than is returned to you in claims. In contrast, the money paid for health care through an MSA will be subject to nominal administration fees.

Typically, a family might spend $5,000 a year in health insurance premiums and get less than $500 in actual benefits. If you cut your premiums to $3500 a year and put the difference in your MSA savings account, you will not only lower your premiums, you will have also lowered your taxable gross income by $1500. It is a win-win situation.

2. Better Choices

Florida MSAs preserve freedom of choice in terms of choosing doctors, hospitals and other health care providers. Patients become consumers of healthcare without the need for referrals, co-pays, etc. Also, a physician's choice of therapies can be made based on their value to the patient, not on the basis of the patient's limited insurance coverage.

3. Increased Access to Services
Certain services not typically covered under traditional benefit plans, such as long-term care, eye-care and dental care, can be accessed through an MSA. MSAs place fewer restrictions on the range of medical services covered.

4. Better Patient-Physician Relationships

With a Florida MSA plan, the physician-patient relationship is freed from the intrusion of third-party payers. Physicians don't face external pressure to withhold beneficial care or to obtain third-party authorization for proposed treatments, an often time-consuming process.

5. Savings
With an MSA, you may carry balances in your account over from one year to the next. If medical expenses are low, the MSA allows you to accumulate and invest funds tax-free. MSA balances can become important savings vehicles for purchasing long-term care insurance and other post-retirement needs not covered by Medicare.

Who can make contributions to a Florida MSA plan?

Either a qualified individual or an employer can make contributions, but not both in the same calendar year.

How much can I contribute to my Florida MSA plan?

65% of the annual deductible for an Individual
75% of the annual deductible for a Family

What happens to my Florida MSA plan at the end of the year?

The money in your account belongs to you. You can roll the money over for future medical expenses or save for retirement.

How do I get money out of my Florida MSA plan for medical expenses?

You can write a bank check, which is supplied to you when your account is opened. You can also write a personal check and reimburse yourself from your MSA account.

How do I get a Florida MSA Plan?

Unfortunately, many health insurance agents and carriers have avoided Medical Savings Account plans. SInce the premiums for these plans are lower, many commissioned agents do not sell these plans. It also requires more than an "order taker" to properly explain these plans and how to best utilize their features. Use the Florida Health Insurance link at the top of this page to reach a Florida MSA specialist.

IRS Resources

IRS Publication 969 Guide to MSA's
IRS Notice 96-53 Answers to questions about MSA's
IRS Publication 502 Eligible Medical Expenses
IRS IRC section 220 Details about MSA's
IRS Form 8853 Filed with form 1040