The Office of Human Resources has announced the introduction of the Health Savings Account (HSA) and Retirement Medical Savings Account (RMSA) for eligible faculty and staff.
These new savings accounts, which are a major component of the Benefits Plan for the Future, will be effective Jan. 1.
The HSA provides employees with an opportunity to pay out-of-pocket health expenses in a tax-favored way while actively employed and during retirement.
Employees who wish to participate in the HSA must be enrolled in the new University-sponsored High-deductible Health Plan (HDHP) with Anthem Blue Cross.
Employees will establish an individual interest-bearing checking account through US Bank, the plan administrator/custodian. Each year, the balance in the individual HSA bank account rolls over to the following year.
The minimum annual employee contribution is $200 ($400 if your annual salary is $100,000 or greater), and the University’s annual contribution is $400.
The maximum annual employee contribution is the amount of the annual individual/family deductible in the HDHP less the amount of the University’s contribution, which means $1,100 for individual coverage and $2,600 for employee plus one or more dependents coverage.
The HSA tax advantages are that employee contributions are pre-tax, University contributions are tax-free, interest/investment earnings grow tax-free and payment for out-of-pocket expenses while actively employed and out-of-pocket health expenses and health premiums during retirement are not taxed.
If you participate in the HSA, you cannot be enrolled in the health flex-spending plan for the same period.
Special HSA workshops will be held as follows:
• Danforth Campus: 10 a.m. Nov. 21, Whitaker Hall, Room 318
• Medical Campus: 2 p.m. Nov. 21, Farrell Learning and Teaching Center, Connor Auditorium
• North Campus: 10 a.m. Nov. 28, Room 1312
• West Campus: 1:30 p.m. Nov. 28, Library Conference Center, Room A/B, lower level.
The RMSA, which is considered a Roth for health care, provides employees with an opportunity to save for the cost of retiree health expenses in a tax-favored way while actively employed. Employees establish a custodial investment account with US Bank, the plan trustee.
The minimum annual employee contribution is $200 ($400 if your annual salary is $100,000 or greater), and the University’s annual contribution is $400. There is no maximum annual employee contribution.
With the RMSA, employee contributions are after-tax; however, University contributions are tax-free, investment earnings grow tax-free and payment for out-of-pocket health expenses and health premiums during retirement are not taxed.
Employees interested in the RMSA may remain in their current health plan and enroll in the health flex-spending plan.
Employees who enroll in both the HSA and RMSA must select which savings account will receive the University’s $400 contribution.
Employees only may enroll in the HSA and RMSA for 2007 during the open-enrollment period, which ends Nov. 30.
“With the HDHP/HSA, the University is offering healthy employees a tax-favored vehicle and an annual $400 contribution that may reduce their out-of-pocket health expenses while actively employed and enable them to save for their out-of-pocket health expenses during retirement,” said Tom Lauman, director of benefits.
“With the RMSA, the University is encouraging employees to save for the significant cost of retiree health insurance by offering a tax-favored vehicle and the financial assistance of an annual $400 contribution,” Lauman added. “These two new benefit plans add flexibility and completeness to our benefits program.”
For more information, visit the benefits pages of the human resources Web site at hr.wustl.edu.