You may request reimbursements from your HCSP account for eligible medical expenses incurred after you end public employment (regardless of age); you retire; or you are collecting a disability benefit from a Minnesota public pension plan.

HCSP funds can only be accessed to reimburse eligible medical expenses. The plan does not allow payouts for any other reason including transfers to another medical savings plan or loans.
 

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 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 incurred time-to-time including co-pays, deductibles, eye glasses, hearing aids, etc. See Eligible Medical Expenses (pdf).
  • Your accumulated expenses must equal $75 or more before you submit a reimbursement request to MSRS.
  • The maximum annual reimbursement is $36,000 for 2021 and $35,000 for 2020. This limit does not include medical, dental or long-term care insurance premiums.
     

What you should 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.

Deadline to Request a Reimbursement


There is no deadline to submit reimbursement requests to MSRS. 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 Timing

Notice, Dec 2020: Due to the unusually high volume of reimbursement requests received by MSRS, processing time is taking longer than normal. Thank you for your patience.


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.

Changing Ongoing Payments


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 does not contact MSRS.  

How to report coverage changes to MSRS

You must notify MSRS when insurance coverage changes occur, even if the premium amount will not change as a result of the new coverage. The insurance provider never contacts MSRS directly. 

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

MSRS must receive your request by the 15th of the month, one month before the change is to occur. For example, if you will go on Medicare Part B on January 1, MSRS must receive your Reimbursement Request form and documentation by December 15.

Complete a Reimbursement Request form (pdf) and submit to MSRS along with documentation from the insurance provider.

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.

MSRS must receive your request to adjust ongoing reimbursements 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.

Remember! The insurance provider never contacts MSRS directly. It is your responsibility to notify MSRS to change the ongoing reimbursement amount.

Call MSRS at 651-296-2761 or 800-657-5757 to request a premium decrease change (assuming the insurance provider has not changed). 

If you do not report the premium decrease change, 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). 

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

Remember! The insurance provider never contacts MSRS directly. It is your responsibility to notify MSRS to change the ongoing reimbursement amount.

Notify MSRS to stop ongoing reimbursements of insurance premiums if you:

To request that reimbursements be stopped, call MSRS at 651-296-2761 or 800-657-5757.

If you are changing insurance providers and want to continue ongoing reimbursements, see "Insurance provider change" for instructions.

MSRS must receive your request to stop ongoing reimbursements by the 15th of the month, one month before the change is to occur. For example, if you want reimbursements to end on January 1, you must notify MSRS by December 15.

Remember! The insurance provider never contacts MSRS directly to let us know that you have discontinued or changed coverage.  

Direct Deposit to Financial Institution


Direct deposit is the safest, fastest, and most convenient way to receive your payment. Payments are made directly to your financial institution. to learn more, see Direct Deposit.

Public Safety Officers & Judges - 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.