| FDIC Decides Insurance Coverage of Medical Savings Accounts FDIC Decides
Insurance Coverage of Medical Savings Accounts
The Medical Savings Account
(MSA) is a relatively new type of trust account that people who are self-employed or work
for a “small employer” (maximum 50 people) can use to pay for certain medical
expenses if their health insurance plan has a high deductible. The benefit of an MSA is
that contributions up to a set amount are tax-deductible. The FDIC’s Legal Division
recently issued an opinion on the insurance coverage of MSAs held at banks and savings
institutions.
In general, an MSA will be considered an individual account for insurance purposes. So,
typically, any funds in your MSA at an insured institution would be added to any other
funds you hold in other individual accounts at the same bank or thrift and be insured to a
limit of $100,000. Under certain circumstances, though, your MSA may be treated
differently.
For more information on the insurance coverage of an MSA, contact the FDIC’s Division of Compliance and Consumer Affairs
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