Payments

Payment Types
Payment Timing
Deadline to Request Reimbursements
Payment Changes (Ongoing Payments)
Public Safety Officers Premium Withholding Program
Reimbursement Request Form
Direct Deposit

 

Payment Types

Monthly insurance premiums

  • Refers to medical, dental, long-term care insurance, and Medicare Parts B, C, & D.

  • Must be premiums paid with after-tax dollars (pre-tax premiums are not reimbursable).

  • May elect to be reimbursed automatically each month, meaning you do not have to complete and submit a form or provide documentation each time you want to be reimbursed.

  • Long-Term Care (LTC) premiums: Publication 502 limits the annual LTC premium reimbursement amount. The maximum annual limit is determined by the age of the covered person. Please refer to Publication 502 for more information.


Other healthcare-related expenses

  • Refers to the expenses that are incurred time-to-time including co-pays, deductibles, eye glasses, hearing aids, etc. See Eligible Medical Expenses.

  • Your accumulated expenses must equal $75 or more before you submit a reimbursement request to MSRS.

  • The maximum annual reimbursement is $33,000 for 2019. This limit does not include medical, dental or long-term care insurance premiums. 

 

What else should I know?

  • Medical expenses paid by an insurance company or other source (such as another tax-preferred medical savings plan) cannot be reimbursed. This is true whether the payments were made directly to you  or to the provider of the medical services.

  • You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the distribution from your HCSP.

  • Payments are "pro-rata," which means an equal portion of the amount will come from each investment fund you have in your account. If you are invested in multiple funds, you cannot specify which fund you want your reimbursement to be paid from.  For example, let's say your HCSP account balance is split equally between  the Stable Value Fund and Money Market Fund. If you request a $100 reimbursement, shares would be sold so that 50% of the reimbursement is paid from the Stable Value Fund and 50% from the Money Market Fund. 
     

Payment Timing

Reimbursement requests are processed by MSRS in the order received. The timing of your payment assumes the reimbursement request is in good order, meaning:

  1. Form is completed in its entirety;

  2. Form is signed and dated by the participant; and

  3. Acceptable documentation of the expense has been included with the Reimbursement Request form.


Reimbursement of monthly insurance premiums
If you requested to have premiums automatically reimbursed each month, payments are mailed to you or deposited in your bank account the last Friday of each month. Please note:  some financial institutions may not post your payment until 2 or 3 business days after the last Friday of the month.


Reimbursement of other healthcare-related expenses
If using direct deposit, assume deposit will be posted to your bank account 7-10 business days after the date MSRS receives your paperwork. If receiving reimbursement by check, please allow additional time for mailing.


Important! Processing time may vary depending upon the volume of requests received by MSRS.

 

Deadline to Request Reimbursements

There is no end-of-year deadline to submit reimbursement requests. This means you can submit your reimbursement request at any time for healthcare expenses incurred this calendar year or in any previous year, as long as the expenses were incurred after you ended employment with your Minnesota public employer.    

 

Payment Changes (Ongoing Reimbursements)

If you have established an automatic monthly reimbursement of medical, dental, or long-term care insurance premiums, you must notify MSRS when there is a coverage or premium amount change. The insurance provider never contacts MSRS directly.  
 

Type of Change

How to Report Change to MSRS
Insurance provider change
(including going on Medicare Part B)
Complete a Reimbursement Request form and submit to MSRS along with documentation from your insurance provider.

Premium amount increase
(same insurance provider)

Complete a Reimbursement Request form and submit to MSRS along with documentation from your insurance provider.

Premium amount decrease
(same insurance provider)

Call MSRS at 1-800-657-5757 to request a premium amount change 

Discontinue insurance coverage OR no longer wish to receive reimbursement of insurance premiums.

Call MSRS at 1-800-657-5757 to request a premium amount change.

 

What if I don't report changes to MSRS?

  • If premium decrease, you will receive an over-payment from your HCSP account, which could be subject to federal and state taxes (normally, payments from the HCSP are tax-free). 

  • If premium increase, you aren’t required to report a premium increase if the insurance provider did not change; however, you will continue to be reimbursed for the lower premium amount.


Timeline to notify MSRS
MSRS must receive your request to adjust ongoing payments by the 15th of the month, one month before the change is to occur. For example, if your premium amount will increase on January 1, you must notify MSRS by December 15.

 

Public Safety Officer Premium Withholding Program

The Pension Protection Act of 2006 allows certain retired and disabled public safety officers to reduce taxable income by up to $3,000 annually to pay qualified insurance premiums.  Insurance premiums must be withheld from their monthly pension benefits and paid directly by MSRS or PERA to the insurance provider.

Public safety officers who participate in the premium withholding program cannot request reimbursement of insurance premiums withheld from their pension that qualify for the $3,000 tax exclusion limit. The HCSP account can be used for other eligible medical expenses, including:

  • insurance premiums in excess of the $3,000 exclusion;

  • insurance premiums not deducted from your monthly pension; and

  • all other eligible medical expenses.