What Is the Deductible for MSA Plans?

A Medical Savings Account (MSA) plan combines a high-deductible health plan (HDHP) with a tax-advantaged savings account. This structure allows participants to save money for medical expenses while benefiting from lower premiums often associated with HDHPs. This article explores the deductible component within these plans, outlining how it functions and its requirements across different MSA types.

Understanding Deductibles in MSA Plans

A deductible in an MSA plan represents the initial amount an individual must pay out-of-pocket for covered medical services before their health insurance coverage begins to contribute. This financial threshold serves as a primary responsibility for the plan participant. Meeting this deductible is a prerequisite for the health plan to start paying a significant portion of medical expenses.

The deductible amount determines when health insurance benefits activate. Until the deductible is satisfied, individuals are typically responsible for the full cost of their covered medical care, though some preventive services may be covered without meeting the deductible. A high deductible is a defining characteristic of health plans associated with MSAs.

Deductible Requirements for Archer MSAs

Archer MSAs were a type of Medical Savings Account designed for self-employed individuals and employees of small businesses. While no new Archer MSAs can be established after December 31, 2007, existing accounts continue to operate under their original rules. These plans are paired with a high-deductible health plan that must meet federally mandated minimum and maximum deductible amounts.

For 2025, an Archer MSA’s associated high-deductible health plan for self-only coverage must have a minimum deductible of $2,850 and a maximum deductible of $4,300. For family coverage, the minimum deductible is $5,700, with a maximum deductible of $8,550. These ranges define the financial responsibility an individual or family must meet before the health plan begins to pay for covered services.

Deductible Requirements for Medicare MSAs

Medicare MSAs are an option for Medicare beneficiaries. These plans feature a high deductible that must be satisfied before Medicare-covered services are fully paid by the plan. Medicare deposits a specific amount of money into the individual’s MSA bank account at the beginning of each year.

This deposited sum is intended to help the beneficiary cover their healthcare costs up to the deductible. For 2025, the maximum deductible for Medicare MSAs is $16,350. Unlike Archer MSAs where the individual typically pays the deductible directly, in a Medicare MSA, the funds provided by Medicare are utilized first.

How the MSA Account Funds are Used with the Deductible

The funds held within an MSA account play a direct role in meeting the health plan’s deductible. For Archer MSAs, contributions made by the individual or their employer are deposited into the account. These funds can then be used to pay for qualified medical expenses, which count towards satisfying the plan’s deductible.

For Medicare MSAs, the annual deposit from Medicare into the MSA account is used for qualified medical expenses. These expenses contribute directly to meeting the plan’s high deductible. Once the total amount of qualified medical expenses paid from the MSA account or out-of-pocket reaches the plan’s deductible, the high-deductible health plan typically begins to cover 100% of the cost for Medicare-covered services for the remainder of the year.