DW has option for a retiree medical savings plan (RMSA) at her work - employees can contribute as of age 50 and are considered vested if still employed there at age 55. It’s been a little unclear what happens if one leaves employment prior to then, so she hadn’t invested in it. However, nearing 55, it’s become an interesting option particularly if we retire before age 65 and use the funds to cover health insurance in the interim. Her HR seems to not know a lot about it.
From the benefits brochure -
- Employees 50 or older can contribute up to $8K/yr after tax. There is no employer contribution.
- Grows by at least 5%/yr, or by 10 yr treasury rates if >5%. Growth is tax free if used for appropriate medical expenses.
- Once separated from the employer, can be used to cover after-tax medical expenses but not any healthcare premiums that would be pre-tax.
- RMSA enrollees can have continued access to the employer’s health plan after separating. By our ages, monthly rates are 180% of what we pay now but still reasonable, and less than COBRA, to keep the same healthcare providers. This factor, to me, would be a primary benefit, given the lack of investment options.
- Reimbursement requests go through a section of her employer’s benefits portal. Unclear who runs it, whether her employer or a 3rd party. The RMSA information doesn’t state.
- Can only support healthcare costs for DW and I. If funds remain upon our deaths the HR rep thought amounts might go to our estate, but wasn’t sure.
Questions -
If we exhaust the account, it’s unclear if we would still retain access to the employer’s health plan. Again, her HR didn’t seem to know a lot about the RMSA. For anyone using an RMSA in this manner, what have been your experiences if using it to pay premiums for a prior employer’s health plan and exhaust the account?
Upon severing from an employer, has anyone been able to rollover an RMSA to an entity such as Fidelity, or even into an HSA? A weakness is the lack of investment options.
Regards,
RR
From the benefits brochure -
- Employees 50 or older can contribute up to $8K/yr after tax. There is no employer contribution.
- Grows by at least 5%/yr, or by 10 yr treasury rates if >5%. Growth is tax free if used for appropriate medical expenses.
- Once separated from the employer, can be used to cover after-tax medical expenses but not any healthcare premiums that would be pre-tax.
- RMSA enrollees can have continued access to the employer’s health plan after separating. By our ages, monthly rates are 180% of what we pay now but still reasonable, and less than COBRA, to keep the same healthcare providers. This factor, to me, would be a primary benefit, given the lack of investment options.
- Reimbursement requests go through a section of her employer’s benefits portal. Unclear who runs it, whether her employer or a 3rd party. The RMSA information doesn’t state.
- Can only support healthcare costs for DW and I. If funds remain upon our deaths the HR rep thought amounts might go to our estate, but wasn’t sure.
Questions -
If we exhaust the account, it’s unclear if we would still retain access to the employer’s health plan. Again, her HR didn’t seem to know a lot about the RMSA. For anyone using an RMSA in this manner, what have been your experiences if using it to pay premiums for a prior employer’s health plan and exhaust the account?
Upon severing from an employer, has anyone been able to rollover an RMSA to an entity such as Fidelity, or even into an HSA? A weakness is the lack of investment options.
Regards,
RR
Statistics: Posted by RogerRabbit — Fri Aug 23, 2024 2:37 pm — Replies 0 — Views 9