Medical savings account
||This article needs attention from an expert in Taxation or Medicine. (February 2009)|
|An aspect of fiscal policy|
A medical savings account (MSA) is an account into which tax-deferred amounts from income can be deposited. These amounts are often called contributions; they may be made by a worker, an employer, or both, depending on a country's laws.
The money in such accounts is expected be used to pay for medical expenses. Withdrawals from the account often called distributions, if made for that reason, may or may not be subject to income tax. Withdrawals without adequate documentation of use for medical expenses are subject to penalties.
Medisave (Chinese: 保健储蓄) was introduced in April 1984 as a national medical savings system in Singapore. The system allows Singaporeans to put aside part of their income into a Medisave account to meet future personal or immediate family's hospitalization, day surgery and for certain outpatient expenses.
Under this system, Singaporean employees contributes 6-8% (depending on age group) of their monthly salaries to a personal Medisave account. The savings can be withdrawn to pay the hospital bills of the account holder and his or her immediate family members.
In the United States
The United States has two medical savings account programs:
- Medical savings account (started 1993, still prevalent in California)
- Health savings account (created 2003, supersedes MSAs, more widely available)
- "Medical Savings Accounts: Lessons Learned from Limited International Experience" (PDF). World Health Organization. 2002.
- "Health Savings Plans: Protecting Your Savings". Health 401k. 25 December 2011. Retrieved 19 January 2012.