Massachusetts Health & Accident Insurance Practice Exam

What is the primary purpose of a Medical Savings Account (MSA)?

1. To provide retirement benefits for employees

2. To help small employers and self-employed individuals pay for medical expenses

3. To cover long-term care expenses

4. To fund employee wellness programs

The correct answer is: To help small employers and self-employed individuals pay for medical expenses

The primary purpose of a Medical Savings Account (MSA) is to help small employers and self-employed individuals pay for medical expenses. MSAs are tax-advantage accounts designed specifically to allow individuals to save money for healthcare costs. They are intended to provide a way for those who may not have access to flexible health insurance options to set aside funds on a pre-tax basis to pay for qualified medical expenses. By enabling such savings, MSAs help mitigate the financial burden that often accompanies healthcare costs, allowing small business owners and self-employed individuals to better manage their medical expenses. This focus on providing financial support for medical expenses distinguishes MSAs from other financial vehicles aimed at separate functions, such as retirement savings or long-term care funding.