Medical Savings Accounts (MSAs) were originally created by the Health Insurance Portability and Accountability Act of 1996 as a possible solution to managing spiraling health care costs. Renamed “Archer MSAs,” the pilot program was to end and be reassessed after the first 750,000 taxpayers adopted MSAs. Due to underwhelming taxpayer response, the 2002 Tax Act has again extended the end of the test program until Dec. 31, 2003.
While most financial advisors and consultants have ignored medical savings accounts, their popularity seems to be slowly growing in law firms. These vehicles are best suited for self-employed individuals, including partners in professional organizations such as attorneys, accountants and doctors.
