AD Banker Comprehensive Practice Exam

Who might be eligible to participate in an MSA?

1. Dan, employed by a large company

2. Henry, retired on Medicare Part A

3. Charles, works for a small bakery

4. Betty, unemployed and on Medicaid

The correct answer is: Charles, works for a small bakery

A Medical Savings Account (MSA) is designed to encourage savings for medical expenses, typically for individuals who are self-employed or work for small businesses that might not offer traditional health insurance. In this context, individuals eligible for an MSA are generally those with high-deductible health plans who can benefit from setting aside tax-advantaged funds to cover their healthcare costs. Charles, who works for a small bakery, is likely a prime candidate for an MSA. Employees in small businesses often do not have access to traditional health insurance plans with lower deductibles, making an MSA a suitable tool for managing healthcare expenses. The ability to save for medical costs while also enjoying tax benefits aligns well with the profile of someone working in a less structured employment environment, such as a small business. The other individuals mentioned may either have access to different types of insurance or fall under other health care financial assistance programs. Therefore, Charles stands out as the most fitting choice for eligibility in participating in an MSA.