NU Online News Service, April 1, 10:15 a.m. – Fortis Health, Milwaukee, says it will continue to sell Medical Savings Accounts.
Fortis Health, a unit of Fortis, Brussels, has been a major player in the MSA market since 1996, when Congress created the small, highly restricted MSA program to give taxpayers a financial incentive to save for routine medical expenses.
Earlier this year, the future of the program was in doubt, because the law that authorized use of the accounts was set to expire Dec. 31.
President Bush saved the MSA program March 9, by signing an economic stimulus bill that keeps the MSA program alive until Dec. 31, 2003.
Holder of MSAs can defer federal income taxes on several thousand dollars of contributions each year. A holder can use account assets to pay for qualified medical expenses without worrying about federal income taxes, and accumulate any unused assets up until retirement age.
MSA holders often combine the accounts with high-deductible indemnity health insurance.
Supporters say the program gives Americans an incentive to hold down the cost of health care along with the freedom to pick their own doctors and hospitals when they are sick.
Critics argue widespread use of MSAs would hurt sick Americans and others with unusually high medical expenses.
Because of the power of the critics, the MSA program is officially a “pilot program” that is open only to certain self-employed taxpayers and small-business owners who meet strict eligibility criteria.
The Bush administration has been working hard to ease the MSA eligibility criteria and put the program on a more permanent footing, Fortis Health says.