{"data":{"id":"us-ok/okla.-stat.-tit.-63-63-2623","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 63, § 63-2623","heading":"Medical savings account - Contributions and withdrawals","body":"A. For taxable years beginning after December 31, 1995, an\n\nindividual who is a resident of this state or an employer shall be\n\nallowed to deposit contributions to a medical savings account. The\n\namount of deposit for the first taxable year subsequent to the\n\neffective date of this act shall not exceed:\n\n1. Two Thousand Dollars ($2,000.00) for the account holder;\n\n2. Two Thousand Dollars ($2,000.00) for the spouse of the\n\naccount holder; and\n\n3. One Thousand Dollars ($1,000.00) for each dependent child of\n\nthe account holder.\n\nB. The maximum allowable amount of deposit for subsequent years\n\nshall be increased annually by a percentage equal to the previous\n\nyear's increase in the national Consumer Price Index (CPI).\n\nC. Contributions made to and interest earned on a medical\n\nsavings account shall be exempt from taxation as adjusted gross\n\nincome in this state as provided for in Section 2358 of Title 68 of\n\nthe Oklahoma Statutes.\n\nD. Upon agreement between an employer and employee, an employee\n\nmay either have the employer contribute to the employee's medical\n\nsavings account under a medical savings account program or continue\n\nto make contributions under the employee's existing health insurance\n\npolicy or program, subject to the restrictions in paragraph 1 of\n\nsubsection E of this section. For purposes of the Medical Savings\n\nAccount Act, an employer shall include a participating employer as\n\ndefined in the Oklahoma State Employees Benefits Act.\n\nE. The medical savings account shall be established as a trust\n\nunder the laws of this state and placed with a trustee.\n\n1. The trustee shall utilize the funds held in a medical\n\nsavings account solely for the purpose of paying the eligible\n\nmedical expenses of the account holder or the dependents of the\n\naccount holder or to purchase a health benefit plan, certification,\n\nor contract if the account holder does not otherwise have health\n\ninsurance coverage. Funds held in a medical savings account shall\n\nnot be used to cover medical expenses of the account holder or\n\ndependents of the account holder that are otherwise covered by other\n\nmeans, including but not limited to medical expenses covered\n\npursuant to an automobile insurance policy, a workers' compensation\n\ninsurance policy or self-insured plan, or another health coverage\n\npolicy, certificate, or contract.\n\n2. The account holder may submit prior to the end of the tax\n\nyear documentation of medical expenses paid by the account holder\n\nduring that tax year to the trustee and the trustee shall reimburse\n\nthe account holder for eligible medical expenses from the medical\n\nsavings account.\n\n3. Any funds remaining in a medical savings account at the end\n\nof the tax year after all medical expenses have been paid unless\n\nwithdrawn as provided for in this section shall remain in the\n\naccount and may be used by the account holder for payment of future\n\nmedical expenses.\n\nF. An account holder may withdraw money from the medical\n\nsavings account of the account holder for any purpose other than a\n\npurpose listed in paragraph 1 of subsection E of this section, only\n\non the last business day of the trustee's business year. If money\n\nis withdrawn on that date, pursuant to this subsection, it shall be\n\nconsidered income for income tax purposes and shall not be eligible\n\nfor the exemption provided in Section 2358 of Title 68 of the\n\nOklahoma Statutes.\n\nG. If the account holder withdraws money for any purpose, other\n\nthan a purpose described in paragraph 1 of subsection E of this\n\nsection, at any time other than on the last business day of the\n\ntrustee's business year, all of the following shall apply:\n\n1. The amount of the withdrawal shall be considered income for\n\nincome tax purposes and shall not be eligible for the tax exemption\n\nprovided in Section 2358 of Title 68 of the Oklahoma Statutes;\n\non E of this\n\nsection, at any time other than on the last business day of the\n\ntrustee's business year, all of the following shall apply:\n\n1. The amount of the withdrawal shall be considered income for\n\nincome tax purposes and shall not be eligible for the tax exemption\n\nprovided in Section 2358 of Title 68 of the Oklahoma Statutes;\n\n2. The trustee shall withhold and shall pay on behalf of the\n\naccount holder a penalty to the Oklahoma Tax Commission equal to ten\n\npercent (10%) of the amount of the withdrawal; and\n\n3. All interest earned on the account during the tax year in\n\nwhich a withdrawal occurs shall be considered income for income tax\n\npurposes.\n\nH. Upon the death of the account holder, the account principal,\n\nas well as any interest accumulated thereon, shall be distributed to\n\nthe estate of the account holder and shall be taxed as part of the\n\nestate.\n\nI. If an employee is no longer employed by an employer that\n\nparticipates in a medical savings account program and the employee,\n\nnot more than sixty (60) days after the final day of employment,\n\ntransfers the account to a new trustee or requests in writing to the\n\ntrustee of the former employer that the account remain with that\n\ntrustee and that trustee agrees to retain the account, the money in\n\nthe medical savings account may be utilized for the benefit of the\n\naccount holder or the dependents of the account holder subject to\n\nthis act, and the money shall remain exempt from taxation pursuant\n\nto Section 2358 of Title 68 of the Oklahoma Statutes. Not more than\n\nthirty (30) days after the expiration of the sixty-day transfer\n\nperiod, if the account holder has not transferred the account or the\n\ntrustee has not accepted the account of the former employee, the\n\nemployer shall mail a check to the last-known address of the former\n\nemployee in an amount equal to the amount in the account on the date\n\nthe check is mailed. The amount shall be taxed and subject to\n\npenalty as provided for in subsection G of this section. If an\n\nemployee becomes employed with a different employer that\n\nparticipates in a medical savings account program before the\n\nexpiration of the sixty-day transfer period, the employee may\n\ntransfer the medical savings account to the trustee of the new\n\nemployer without penalty.","path":["OK Code","Title 63"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os63.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"dbb2fe87046c248955bef1ef0e319ecd9e6c82d93d6e41289042d4f92b984045","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-63-63-2622","next":"us-ok/okla.-stat.-tit.-63-63-2654.1"},"notice":"GroundRules: Original legal text. Not legal advice."}