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How would you like to have your personal health care funds earning you money while they accumulate?

In 1996, Congress created a pilot program that enables you to do just that. As part of the Health Insurance Portability and Accountability Act (HIPAA), Congress created Medical Savings Accounts (MSAs) as a means for self-employed individuals and members of small employer groups (50 employees or fewer) to take more direct control of their health care costs. Under the program, these consumers are allowed to combine an MSA with their high-deductible health insurance plans already in place.

An MSA is a personal savings account, funded by tax-free contributions from the individual, designated for medical expenses not covered by insurance. MSA funds can be used to pay costs such as co-payments, deductibles and other out-of-pocket expenses.

To participate in the MSA program, you must have a high-deductible health plan in place. Once that is established, you can deposit money into the MSA just as you would any other savings or investment account. All funds deposited in the MSA are tax-deferred, just like a 401(k) or an IRA. You can withdraw money at any time to pay for qualified medical expenses without paying any taxes on your withdrawal. If money is withdrawn for non-medical reasons, it is subject to taxation and penalties.

Perhaps best of all, the money you place in an MSA is your money to spend as you need it. It rolls over every year and does not disappear if it isn’t used. Thus, it can earn interest over many years, furnishing you a solid financial base to handle your long-term needs. When the account grows to a certain level, you can exercise other options such as mutual funds and high-growth investment tools. The MSA can become an important part of your overall financial portfolio.

The MSA program allows you to deposit up to 65 percent of your regular health plan’s deductible per covered person. For example, with the MyHealth program deductible of $2,000, you as an individual could contribute up to $1,300 annually to your MSA. For family coverage, the government’s allowable contribution limit rises to 75 percent of the family deductible. The MyHealth family deductible is $4,000, so each family can contribute $3,000 annually into its MSA.

For Farm Bureau members, an MSA program is included as one of the four MyHealth benefit options. Call 800-862-0085 or talk to your local Nationwide agent for details.

Check the Featured Links section of the OFBF Web site for more information.