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

Archer MSAs and HSAs both serve the similar purposes: saving for future medical expenses on a tax-exempt basis. There are, however, some key information to know about each:

For Archer MSAs

  • You can’t contribute to an Archer MSA unless you were an active participant before 2008. The only exception is You became an active participant for a tax year ending after 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer.
  • Archer MSAs are reserved for either self-employed (or the spouse of a self-employed person) who maintains a self-only or family HDHP or those employed by a small employer that maintains a self-only or family HDHP for you (or your spouse).
  • You and your employer can’t make contributions to your Archer MSA in the same year.
  • There are two limits on the amount you or your employer can contribute to your Archer MSA: the annual deductible limit and an income limit. You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan). You can’t contribute more than you earned for the year from the employer through whom you have your HDHP. If you are self-employed, you can’t contribute more than your net self-employment income. This is your income from self-employment minus expenses (including the deductible part of self-employment tax).

For HSAs

  • HSA’s can be offered by a variety of companies.
  • HSA contributions made by your employer may be excluded from your income.
  • The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. For 2017, if you have self-only HDHP coverage, you can contribute up to $3,400. If you have family HDHP coverage, you can contribute up to $6,750.
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