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Medical savings accounts (MSAs) are health accounts
that are established in conjunction with high-deductible health
insurance. They can be set up by individuals, employers, or by
the government. The most common type is the American
employer-funded MSAs. In this type of health plan, employers
purchase a high-deductible, or catastrophic, insurance policy for
their employees, which is much cheaper than a traditional
insurance package. Employers then deposit a portion of the funds
saved into MSAs for their employees, who then use these funds to
purchase medical care. Once these funds have been exhausted, the
employees are responsible for the payment of their medical care
up to the cap where the catastrophic insurance begins. All of the
MSA funds belong to the employee, including any funds remaining
in the account after a specific period (usually a
year).
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