Many retirees elect automatic monthly reimbursements from their HCSP account for recurring medical and dental insurance premiums. Retirees who receive ongoing reimbursements must notify MSRS when their premium amount changes. Unfortunately, they sometimes forget to do so, which can result in an over- or under-payment from their HCSP account.
If employer-sponsored medical or dental premium amounts change, the employer may want to alert retirees to notify MSRS to adjust the monthly insurance premium amount reimbursed by their HCSP account (see box for suggested language). It is especially important if the employer offers a premium holiday or reduces the premium amount, since this will result in an over-payment from the HCSP. Although HCSP reimbursements are tax-free, an overpayment may be subject to federal and state income taxes.
Sample language to include in retiree communications - feel free to modify to meet your needs
If you receive monthly reimbursements from your Health Care Savings Plan (HCSP) for medical, dental, or Medicare insurance premiums, please be sure to notify Minnesota State Retirement System (MSRS) of premium amount changes. Failure to notify MSRS to adjust your reimbursement amount could result in an over- or under-payment from your HCSP account. Please contact MSRS at 1-800-657-5757 to discuss how to change your scheduled reimbursement amount.