MMC Benefits Handbook
Health Savings Account
If You No Longer Satisfy the Eligibility Requirements
Your before-tax contributions to an HSA will end on the date you no longer satisfy the eligibility requirements to make before-tax contributions, for example, if you do not have medical coverage under a high deductible health plan. However, after that date, you may make contributions directly to the HSA Administrator which may be deductible on your federal tax return. Please consult your personal tax advisor. You may also receive reimbursements from your account. Amounts contributed to an HSA belong to you and are completely portable. You cannot roll the HSA funds over into an IRA. You may keep your HSA with the current provider or you can roll the HSA funds into another HSA account with another provider.
If You Leave and Are Rehired
If you leave salaried employment and are rehired as a salaried employee within 30 days in the same calendar year, your HSA contribution election will be reinstated automatically with the same before-tax contributions in effect before you left. You are permitted to change your election amount at any time.
If You Die
Your before-tax contributions will end on the day of your death. Your beneficiary will receive your account. The tax treatment depends on who you have designated as your beneficiary. For example, if you designate your spouse as your beneficiary, your spouse becomes the owner of the HSA and the transfer is not subject to taxation unless your spouse receives a distribution that is not used for a qualified medical expense. If your designated beneficiary is anyone else, your account ceases to be an HSA and your beneficiary will receive the fair market value of the HSA assets as of the date of your death, which is generally includible in the beneficiary's gross income. Unless your beneficiary is your estate, the taxable amount is reduced by any payments from your HSA made for your qualified medical expenses incurred before your death, if the payments are made within one year after death. You should consider talking to a professional tax advisor before you designate a beneficiary.
If You Discontinue Contributions
If you discontinue before-tax contributions to the HSA, you may continue to receive reimbursements from your account. Any unused balance in your account at the end of the calendar year will be carried forward to the next calendar year, even if you do not elect to make before-tax contributions to the HSA in the next year. You may also make after-tax contributions directly to the Health Savings Account Administrator which may be deductible on your federal tax return. Please consult your personal tax advisor.
If You Become Disabled
Your before-tax contributions will continue to the HSA while you are receiving Short Term Disability benefits. If you then become eligible for Long Term Disability benefits, your before-tax contributions to your account will cease, but you may make contributions directly to the HSA Administrator, which may be deductible on your federal tax return. Please consult your personal tax advisor. You may continue to receive reimbursements from your account.
If You Have an Authorized Unpaid Leave of Absence
Your before-tax contributions to your HSA will cease on the day you begin leave. However, your contributions may be made on an after-tax basis directly to the HSA Administrator during the leave, which may be deductible on your federal tax return. Please consult your personal tax advisor.
You may continue to receive reimbursements from your account, regardless of whether you make any contributions during the leave.
If you return to active employment within the same plan year, your participation will be reinstated automatically with the same before-tax contribution in effect before you left. However, you may change your election at any time.
If the Company Ends the Before-Tax HSA Contribution Option
While the Company intends to maintain the ability to make before-tax contributions via payroll deduction to the HSA, the Company reserves the right to terminate or amend the ability to contribute via payroll deduction to the HSA, at any time and for any reason as it deems advisable, as to any or all employees covered. In fact, as a matter of prudent business planning, the Company periodically evaluates its before-tax benefits offerings.