The Retirement Medical Savings Account provides employees with the opportunity to save for the significant cost of retiree health insurance while actively employed at the University. Employees make an after tax contribution, the University makes a tax-free contribution based on a minimum employee contribution and the earnings on these contribution investments grow tax-free until retirement and age 55 or older. At that time, the retirees may use the balance in their RMSA account to make non-taxable payments for retiree health plan premiums including Medicare and out-of-pocket retiree health expenses.

Enrollment in this plan is limited to the annual Open Enrollment period.

Overview

An RMSA can be thought of as a Roth IRA for health care. It is a trust or custodial account established exclusively to receive after tax contributions on behalf of eligible active faculty and staff to be used exclusively for retiree health care expenses. Earnings on the amounts contributed to an RMSA accumulate on a tax-free basis and are not subject to tax if they are used to pay for eligible medical expenses for employees and their dependents after the employee retires. Eligible expenses include retiree health plan premiums, Medicare premiums and out-of-pocket health expenses after retirement.

The RMSA enables WU to provide its employees with an account that they can use to save for retiree medical expenses on a tax-favored basis (earnings grow tax-free) while employed. The RMSA coupled with our FSA offers an opportunity for employees to budget their out-of-pocket health care expenses when enrolled in lower cost health plans (e.g. an HMO) while active and save for retiree medical expenses.

Plan Details

To encourage our employees to participate in the RMSA, the University will make a contribution of $400 annually to the accounts of those employees who contribute a minimum annual amount or greater based on their salary. If an employee’s annual base salary is under $115,000 (indexed), the required minimum contribution will be $200 annually and if an employee’s annual base salary is $115,000 or greater, the required minimum contribution will be $400 annually. The contribution amounts by both employees and the University will be made per pay period (biweekly or monthly) and will require the employee to select from several investment fund options. If an employee enrolls in both the HSA and the RMSA, he or she will receive only one $400 University contribution to the account of choice.

The University contributions to the RMSA are not subject to tax if they are used to pay for eligible medical expenses for employees and their dependents after the employee retirees. The participant will only be allowed to withdraw from their account after they attain age 55 or older, are retired and enrolled in a retiree health plan such as Medicare Parts A & B, a Medicare Supplement Plan, or a health plan for retirees under age 65. RMSA funds cannot be used to reimburse the participant for COBRA premiums even if they are retired. Reimbursements for eligible expenses are paid on a pro-rata basis from employee and employer funds. The unused funds must always stay in the WU RMSA trust and cannot be used for anything other than retiree healthcare expenses while the employee and/or spouse (if applicable) are living.

If the employee/retiree dies and has a surviving spouse, ownership of the account and all its assets will be transferred to the spouse and must be used for his or her retiree healthcare expenses. If the employee/retiree dies and does not have a surviving spouse, the unused employee contributions and earnings associated with those contributions will be paid to the employee’s estate. (This will seem contradictory to what is stated in the Plan Document, however, this payment is made from University funds outside of the Plan.)  The unused University contributions and the earnings associated with those contributions will be forfeited back to the University to be used to offset administration fees.

The University will pay the administration fees for all active employees who are currently participating in the plan and for all Washington University retirees and surviving spouses. This fee is approximately $20 per year. Administration fees will be deducted from participant account balances for active employees that stop contributing to the RMSA and those who terminate employment with Washington University.

Enrollment in the RMSA will be conducted during the annual health/dental and flex spending plans open enrollment in November for the following calendar year. The employee’s annual election to enroll in the RMSA may not be made outside of this annual open enrollment period. The employee cannot change their contribution amount mid-year, but may cancel their contribution at any time.  Those who cancel their contribution during the year may not re-enroll in the plan until the following year.

For complete details of eligibility, definitions, benefits and guidelines, please refer to the RMSA PlanDocument.

Fund Information:

Effective October 13, 2010, the RMSA plan administrator is TIAA-CREF.  If you enroll in the RMSA during Open Enrollment, your contributions and the University's contributions will be automatically invested in the TIAA-CREF Lifecycle Fund that is most appropriate for your age.  After your initial payroll deduction, you will have the opportunity to transfer your funds to other investment options and/or to change the investment allocation of future contributions by either calling TIAA-CREF at 1-877-554-1004, or on-line at www.TIAA-CREF.org.  The Plan offers the 17 different TIAA-CREF investment funds listed by type of investment below:   

Danforth Benefit Representative's Contact Information:
Name: Mary Stull
Email: marystull@wustl.edu
Phone: 935-5701
Campus Box: 1190

Medical School Benefit Representative's Contact Information:
Name: Pam Guntli
Email: guntlip@wustl.edu
Phone: 362-4925
Campus Box: 8002