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What is the difference between an Archer MSA and an HSA?

Archer MSAs and HSAs both serve the same purpose: saving for future medical expenses on a tax-exempt basis. There are, however, some key differences:

  • You can’t contribute to an Archer MSA unless you were an active participant before 2008. The only exception is if you became an active participant after 2007 by reason of coverage under a HDHP of an Archer MSA participating employer.
  • You and your employer can’t make contributions to your Archer MSA in the same year.
  • For Archer MSA, you or your employer can contribute up to 65 percent of your annual deductible if you have a self-only health insurance plan and 75 percent if you have a family health insurance plan.
  • As with an HSA, you have to be covered by a high-deductible health plan (HDHP) to be eligible to contribute. But the Archer MSA requires higher annual deductibles and lower maximum annual out-of-pocket expenses.

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