Can HSA and Archer MSA Savings Accounts be used by the Self-employed?
May 6th, 2009
Paying for your own health care sounds like an impossible task, but it really isn’t. You open up a health savings account (HSA), and instead of paying premiums to a health insurance company you would insure yourself with your own money. The money in your HSA would will grow interest and go untouched until the time you need it to pay for your health care. Many health insurance policies charge over $700 for health insurance for the self-employed, so instead of giving that money to the insurance company, you can put that money away to grow interest. The money will be used by you for your health care needs, and for the needs of your family. If you and your family are healthy, you might not have to dip into that money very often, so you could build up a large nest egg. If you never have to use it, it will continue to grow. Creating a health savings account makes more financial sense to a lot of self-employed individuals, because paying money every year for health insurance for the self-employed could be building up in your own health savings account.
Another form of self-employed health insurance coverage is called Archer MSA. Archer MSA is designed to insure small business people who employ from 2 to 50 employees. The MSA savings account is tax-exempt, and totally self-directed. With Archer MSA health coverage you save the money for the high deductibles, and the insurance company will pay the remaining part. The health insurance premiums are low, because you are for the most part, paying for your own health care. You are allowed to save above the deductible amounts, and you can invest that money or turn it over into an investment account if you want to.
The health savings accounts are not necessarily health insurance for the self-employed; anyone can have an account such as these. You can use HSA and the Archer MSA accounts to pay for in-patient, and out-patient health care. You may also use these types of health insurance savings accounts to pay for care in a long-term care facility, such as in a nursing home. You can keep your health care savings account all your life. By investing anything over the deductible amount, such as in the Archer MSA, your money will be earning money for you. You never know what could happen in your future. If you had to make a transition from the comforts of home to a long-term health care facility, you would have the funds available to pay for all or part of your stay each month. The plans are fabulous for when you do have personal or self-employed health coverage but you also have a very big deductible. Putting money into these accounts can pay for the amount that your existing coverage will not touch. You benefit from keeping your health insurance premiums low and you have your little nest egg to cover any expenses that you have over and above your self-employed health care insurance.
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