§ 138. Medicare Advantage MSA
(a)
Exclusion
Gross income shall not include any payment to the Medicare Advantage MSA of an individual by the Secretary of Health and Human Services under part C of title XVIII of the Social Security Act.
(b)
Medicare Advantage MSA
For purposes of this section, the term “Medicare Advantage MSA” means an Archer MSA (as defined in section
220
(d))—
(2)
with respect to which no contribution may be made other than—
(c)
Special rules for distributions
(1)
Distributions for qualified medical expenses
In applying section
220 to a Medicare Advantage MSA—
(2)
Penalty for distributions from Medicare Advantage MSA not used for qualified medical expenses if minimum balance not maintained
(A)
In general
The tax imposed by this chapter for any taxable year in which there is a payment or distribution from a Medicare Advantage MSA which is not used exclusively to pay the qualified medical expenses of the account holder shall be increased by 50 percent of the excess (if any) of—
(ii)
the excess (if any) of—
(I)
the fair market value of the assets in such MSA as of the close of the calendar year preceding the calendar year in which the taxable year begins, over
(B)
Exceptions
Subparagraph (A) shall not apply if the payment or distribution is made on or after the date the account holder—
(e)
Reports