FinanceProfessor.com

Bringing the real world to the classroom and vice versa!

Medical IRAs

The Kassebaum-Kennedy bill (HR 3103) became effective for tax year 1997 and it allows a four year pilot Medical Savings Account program that would allow no more than 750,000 Medical Individual Retirement Accounts (IRAs). The Medical IRAs would be offered to a limited pool of individuals employed at firms with 50 or fewer employees and those who are self-employed. Each policy could initially cover up to 50 employees. Any firm that has 50 or less employees could grow to 200 employees and still offer IRAs to all its employees.

In addition, anyone without insurance would be eligible on an unlimited basis -- until the pool exhausted its 750,000 policy limit. However, any uninsured investors would not count against the 750,000 policy limit. It is projected that the average MSA policy will cover 2.2 people per policy. This would cover approximately 2 million people in medical IRAs.

At the end of four years, Congress would have to vote before the program’s eligibility expanded to cover more investors. All of those who were permitted to sign up in the first four years would be entitled to continue the accounts, even if Congress did not decide to expand the program. However, the 105th Congress could vote to extend Medical IRAs to the whole population.

Medical IRAs

Deductibles	Before a medical IRA can qualify for favorable tax treatment it must meet a minimum deductible of &1500 and a maximum deductible of $2,250. For families the minimum deductible would be $3,000 and the maximum deductible would be $4,500.
Money Rollover	Any money that remains in the account at the end of the year can be rolled over to the next year for future health care expenses.
Non-Medical Charges	Distributions that are for non medical expenses are included in taxable income and such distributions are also subject to an additional 15% tax except in cases of death, disability, or the investor is over 65 years of age.

Most Popular

Note: We have been having difficulty with delivery via Bcentral (our main mail server). Therefore we have added two back-up mail providers for the newsletter. You can sign up through Topica or Yahoo. In all cases I will never sell, give, or trade your email address.

Most recent newsletter (well at least when I remember to update it-if not check the archive)

NEW!!!

Message boards for Jim's Current Students and former students

FinanceProfessor.com message board!
A 9-11 related board where some survivors shared their stories and we tracked former classmates.

Academic Finance Conferences and Conventions

FMA Online

St. Bonaventure

University!

Park and Shop-My favorite grocery store, find out why

You can Find almost any book at Amazon.com (P.S. While I am not trying to make money on this, covering some of the costs would be nice. So if you could, when you buy a book from Amazon, click through here. Thanks!)

**************************************************************

Due to several requests, the non-Financial Pages have been de-emphasized but remember Finance is supposed to be fun

so I will be keeping these "fun" pages online.

**************************************************************

History Links
Fun Links

Running/Fitness/nutrition/yoga links

Hiking/camping/environment

and Gardening

Diabetic cat links

Reading

FastCounter by LinkExchange