To the cheers of small business owners, Congress this month created Health Savings Accounts (HSAs), as described on page 1. That adds a new acronym to the already confusing tangle of tax-advantaged health care spending, which includes FSAs, MSAs, HRAs and more.
But as this special report explains, HSAs could turn out as an outstanding tax savings vehicle for you and your employees. Here's how:
Health savings accounts: the basics
The new HSAs are tax-free accounts, somewhat similar to IRAs that people with high-deductible insurance policies can use to pay medical expenses. They are an attractive option for self-employed people and employees of small firms.
HSAs completely replace the old-fashioned Medical Savings Account (MSA), a pilot program more limited in scope. (After 2003, MSAs are available only to individuals and small employers that already had MSA arrangements in place as of Dec. 31. If you h...(register to read more)