An opportunity presented itself in this past round of bargaining. MAPE previously negotiated deferring 1% of salary for its members into a Health Savings Account. The state was willing to consider adding this to our negotiations, and it went into practice faster than many in state service were expecting, with the comparatively fast ratification of the union contracts in the spring legislative session.
This account is administered by the Minnesota State Retirement System (MSRS), and although dedicated to health care, is also an investment vehicle- and a relatively high value one in that both contributions and disbursements are tax free- which means comparatively more value to your salary.
The HSA plan has some distinct requirements: 1) It must be applied broadly to a defined represented group (such as MGEC members); 2) it must be for a fixed contribution amount among the members, such as the 1%, currently established; 3) there are very limited circumstances to opt out; 4) you may elect to change investment vehicles for the contributions; and 5) the plan contributions become available to you when you leave state service either by a job change or through retirement.
We know that our more senior members may ask- “Why can’t I contribute more?” while our younger members may ask- “Why can I contribute less or none at all?” The short answer is simply, the plans don’t allow for those options. Health care costs are the number one cited reason our MGEC retirees don’t retire earlier. We recognize that the HSA is a plan that won’t immediately meet everyone’s needs or desires, but it is an excellent opportunity to help our members plan for their future. We expect that everyone will have health care expenses after state service, and that money saved through this account can help our members and their families in the long run.
Be sure to go into your HSA account and review the investment options. The default investments are likely not the ones you would pick if you are in the early to middle portion of your career.