Can you contribute to an MSA and an HSA?

Many people have questions about contributing to both an MSA (Medical Savings Account) and an HSA (Health Savings Account). Let's explore if it is possible to contribute to both types of accounts.

MSA and HSA are both tax-advantaged accounts that can help you save for medical expenses. However, there are differences between the two in terms of eligibility, contribution limits, and other rules. Here's a breakdown:

• MSA (Medical Savings Account):
• Eligibility is limited to individuals with a high-deductible health plan.
• Contributions are tax-deductible and grow tax-free.
• Contribution limits are lower compared to HSAs.
• HSA (Health Savings Account):
• Eligibility requires a high-deductible health plan.
• Contributions are tax-deductible, grow tax-free, and withdrawals are tax-free for qualified medical expenses.
• Higher contribution limits than MSAs.

Now, can you contribute to both an MSA and an HSA? The short answer is no. You can't contribute to both simultaneously. However, there are scenarios where you may switch from an MSA to an HSA or vice versa:

• If you become ineligible for your MSA, you can transition to an HSA.
• If you no longer have an HSA-eligible health plan, you can contribute to your MSA.

It's essential to be aware of the rules surrounding both types of accounts to make the best decision for your healthcare needs and financial goals. Consulting with a financial advisor can also provide personalized guidance based on your situation.

When it comes to managing healthcare expenses, understanding the differences between MSAs and HSAs is crucial. Both accounts serve as tools to save for medical costs, but only one can be funded at a time based on your health plan eligibility.