Difference between HSA and MSA

The rising cost of healthcare makes it an absolute necessity to acquire health insurance in the US. Both the HSA and MSA plans are important plans that help one save for their future. MSA has been in existence since 1997 while HAS was introduced in 2004.. The HAS plan is similar that of IRA only that the savings of the plan covers only medical expenses only. Although the Health saving Account is an available option for all taxpayers, it’s a more expensive way to save for medical emergencies. The accounts allow one to earn interest on their savings. The savings are also tax deferred and the saving can be used to cover future medical expenses without incurring any tax on them.

HSA plan

Then Health Saving Account or HAS was made operational in 2004 and has become very successful with the saver so much that it is almost replacing the  Medical Saving Account or the MSA which has been in operation since the 70s. The accounts can be opened by anybody. Among the benefits is that the savings on the accounts are tax differed and that the saving in the savings can be utilized at any point or time. Every year’s savings that remain unused are rolled over the next period every year. If the account still has funds at the time of retirement, these can be withdrawn by the saver at retirement without incurring any tax liability on those balances. Only the individual taxpayer can set their HSA and they cannot be transferred to another persons account.



The Medical Saving Account was established to cultivate the culture of responsibility on one’s health by making savings for any future medical expenses. The account is open to any member who wants to supplement any other health plan s that they hold and the contributions can be made by either the person or the employer or both. Withdrawals from the account attract no tax obligations but any withdrawals for other than medical purposes are subject to tax.

Distinction between MSA and HSA

Both the HSA and MSA are savings plans for future medical expenses with MSA coming in the 70s while HAS was introduced in 2004. HSA is a permanent plan that is portable and incase of a switch to a new jobs, the savings dare not lost. This is in contrast to MSA is only open to taxpayers and has a limited scope. The contributions to the HAS plan also tend to be higher than those of MSA. HSA is therefore considered as an expansion on MSA, and is slowly replacing MSA. Another point of difference is that HSA can be held by more than one joint holder while MSA is only for the benefit of the contributor. The savings of an MSA account can be rolled into the


The savings in HSA are portable and belong to the contributor even if they shift they jobs

HSA is only open to tax payer while MSA can only be operated by self employed and employers with fewer than 50 employees.

HSA has higher contributions than MSA; individual contribution to HSA will be $3,050 as from 2011 and $ 6,150 for families.

HSA can be either an individual or joint account with either or both partners contributing.