The flexible, affordable answer to rising health care costs
It's no secret the cost of health care keeps rising, even faster than the rate of inflation.
MERS Health Care Savings Program is an innovative way to help employees prepare for those rising healthcare costs, with a tax-free medical savings account for use after leaving employment.
How It Works
Individual employee accounts are invested in MERS investment funds and grow tax-free. After leaving employment, the vested account balance is available for tax-free reimbursement of IRS-approved medical expenses, for the employee, any eligible dependents, and even a beneficiary on a taxable basis. The program can be used alone, or to complement an existing health care plan.
Features & Benefits
The MERS Health Care Savings Program is a great benefit employers can offer employees, and a great way to help employees prepare for future health care costs:
| Features of the Health Care Savings Program for Employers |
Features of the Health Care Savings Program for Participants |
- Tax-free contributions are exempt from FICA (7.65%)
- MERS administers the entire plan
- No charges or fees for employers
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- Access to MERS investment funds
- Ability to name beneficiaries
- Use of mySourceCard® debit card for eligible participants
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Qualified Medical Expenses
They are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Dental Expenses. However, even though non-prescription medicines (other than insulin) do not qualify for the medical and dental expenses deduction, they do qualify as expenses for Health Care Savings Program purposes.
Note: After 2010, non-prescription medicines (other than insulin) do not qualify as an expense for Health Care Savings Program purposes.
Qualified medical expenses from your Health Care Savings Program include the following.
- Amounts paid for health insurance premiums
- Amounts paid for long-term care coverage
- Amounts that are not covered under another health plan
What is a reimbursable health care expense? View Publication 502
Wage and Contribution Reporting Updates, click here to learn more.
Attention Employers! MERS has implemented a new process to assist you with providing MERS benefit information to your new hires. Click here for more information.