An Archer Medical Savings Account (MSA) may be established by:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An Archer MSA is a tax-advantaged account created by federal law for a narrow class of users: self-employed individuals and employees of small employers, and only when they are covered by a high-deductible health plan (HDHP) that meets statutory requirements. The Archer MSA predates the more widely available Health Savings Account and was designed to give the self-employed and small businesses a way to save for medical costs while keeping premiums affordable through a high deductible. Because this restricted eligibility is the defining feature of the Archer MSA, option A is the correct statement.
Why the other options are wrong
- B) Merely having access to a cafeteria plan does not qualify a person for an Archer MSA; the individual must be self-employed or with a small employer and must actually be covered by a qualifying high-deductible plan.
- C) Archer MSAs are not a Medicare product; prescription drug coverage for Medicare beneficiaries is provided through Part D plans, not through an Archer MSA. The two programs serve entirely different populations and purposes and are not interchangeable.
- D) Medicaid cost sharing is a benefit of the public Medicaid program for low-income residents who meet income and categorical eligibility rules, which is completely separate from the privately funded Archer MSA.
Memory hook
Archer MSA = the boss's own savings stash: self-employed or small-firm plus high-deductible, nothing else.