Medical Savings Account Act

Miss. Code Ann. tit. 71, ch. 9
in effect

Miss. Code Ann. § 71-9-3 Definitions.

As used in this chapter: “Account administrator” means a state chartered bank, savings and loan association, credit union or trust company authorized to act as a fiduciary and under the supervision of the Department of Banking and Consumer Finance or the Department of Savings Associations, as appropriate; a national bank, national lending association or federal savings and loan association or credit union authorized to act as a fiduciary in this state; an insurer licensed and admitted to do business in this state; a third party administrator licensed by the Mississippi Commissioner of Insurance; or an employer, if the employer has a self-insured health plan meeting federal ERISA requirements. “Account holder” means a resident individual or an employee for whose benefit a medical savings account is established. “Dependent” means the spouse of an account holder or the child of an account holder if the child is: Legally entitled to the provision of proper or necessary subsistence, education, medical care, or other care necessary for his or her health, guidance or well-being and not otherwise emancipated, self-supporting, married or a member of the Armed Forces of the United States; or Mentally or physically incapacitated to the extent that he or she is not self-sufficient. “Domicile” means a place where an individual has his or her true, fixed and permanent home and principal establishment, to which, whenever absent, he or she intends to return. “Eligible medical expense” means an expense paid by a taxpayer for medical care described in Section 213(d) of the Internal Revenue Code. “Health savings account” means a trust or custodian established in this state pursuant to Section 233 of the Internal Revenue Code of 1986 and rules or guidance thereunder issued by the U.S. Department of the Treasury or Internal Revenue Service. “High deductible health plan” means a health coverage policy, certificate or contract that provides for payments for covered benefits that exceed the higher deductible. “Higher deductible” means a deductible of not less than One Thousand Five Hundred Dollars ($1,500.00) but not more than Two Thousand Two Hundred Fifty Dollars ($2,250.00) for individual health coverage, and not less than Three Thousand Dollars ($3,000.00) but not more than Four Thousand Five Hundred Dollars ($4,500.00) for health coverage provided to an individual and his or her dependents, in tax year 1994. Beginning after 1998, such deductible limits thereafter shall be adjusted annually in fifty-dollar increments for increases in the cost of living, as measured by the medical costs component of the Consumer Price Index. “Medical savings account” means an account established to pay eligible medical expenses of the account holder and his or her dependents and, for purposes of state income tax deductions, includes the term “health savings account” as defined in paragraph (f) of this section. “Medical savings account program” means a program that includes all of the following: The purchase by an employer of a qualified higher deductible health plan for the benefit of an employee and his or her dependents or the purchase by a resident individual of a qualified higher deductible health plan for his or her benefit or for the benefit of his or her dependents, or both; The payment on behalf of an employee into a medical savings account by his or her employer or payment into a medical savings account by a resident individual on his or her behalf of at least sixty-six and two-thirds percent (66-2/3%) of the premium reduction realized by the purchase of a qualified higher deductible health plan; and An account administrator to administer the medical savings account and the reimbursement of eligible medical expenses therefrom. “Qualified higher deductible health plan” means an accident and health insurance policy, certificate or contract that: Is purchased by an employer for the benefit of an employee or by a resident individual for his or her benefit; and Provides for payment of covered expenses that exceed the higher deductible, but shall not exceed the maximum out-of-pocket expenses of Three Thousand Dollars ($3,000.00) for individual coverage and Five Thousand Five Hundred Dollars ($5,500.00) for family coverage. “Resident individual” means an individual who has a domicile in this state.

Miss. Code Ann. § 71-9-5 Authority to establish medical savings account; limits on deductible amounts contributed to account; interest earned on account excluded from gross income.

Each employer shall be permitted to offer voluntarily the following programs: Continued coverage under the employer’s existing health coverage policy, certificate or contract; or Participation in a medical savings account program. An employer that previously did not provide an accident and health insurance policy, certificate or contract for his or her employees may establish a medical savings account program. In this case, the premium reduction referred to in Section 71-9-3(j)(ii) shall be based on the cost of similar coverage with a Five Hundred Dollar ($500.00) deductible. A resident individual may establish a medical savings account for the benefit of himself or herself and his or her dependents. Contributions to a medical savings account established by a resident individual for a tax year shall not exceed the allowable deductible for a qualified higher deductible health plan. Except as otherwise provided by law, the principal contributed and the interest earned on a medical savings account shall be excluded from the taxable gross income of the account holder under Section 27-7-15.

Miss. Code Ann. § 71-9-7 Use of funds in account; distribution of funds in account upon death of account holder.

Except as otherwise provided in Section 71-9-9 of this chapter, an account administrator shall use the funds held in a medical savings account solely for the purpose of paying eligible medical expenses of the account holder, or his or her dependent, or to pay for an accident and health insurance policy, certificate or contract if the account holder would not otherwise have accident and health insurance coverage. The account holder may submit documentation for eligible medical expenses paid by the account holder during a tax year to the account administrator, and the account administrator shall reimburse the account holder for the eligible medical expenses out of the medical savings account. Upon the death of the account holder, the account administrator shall distribute the principal and accumulated interest of the medical savings account to the estate of the account holder, unless the account holder has designated a beneficiary in writing to the account administrator, in which case the accountant administrator shall make such distribution to the designated beneficiary.

Miss. Code Ann. § 71-9-9 Withdrawals from account by account holder.

Unencumbered funds that have accumulated in a medical savings account that are in excess of the higher deductible may be withdrawn by the account holder for purposes other than paying eligible medical expense or procuring health coverage. Money withdrawn pursuant to this section shall be considered gross income as provided in Section 27-7-17, Mississippi Code of 1972.

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