An account into which one makes
tax-deferred contributions that can be used for present and future medical
expenses. An Archer MSA is used in conjunction with an
insurance policy with a high
deductible. An Archer MSA may be used in order to offset the high deductible on one's other insurance policy.
One does not pay taxes on
withdrawals from a health savings account, unless one withdraws funds for a non-medical reason, in which case they are taxed as
ordinary income. If one is under 65, there may also be a
penalty associated with a non-medical withdrawal.