Health Savings Account (HSA)

Our High-Deductible Health Plan (HDHP) with Health Savings Account (HSA) offers comprehensive health care coverage at a lower premium and higher deductible than traditional health care plans. As its name suggests, the plan also features an HSA. You can use funds in this account to pay for eligible services, or you can choose to pay for these expenses out of your own pocket and save your HSA funds for future expenses on a tax-free basis. Note: You can only use HSA funds as they are deposited in your account. You can always reimburse yourself later once you have accumulated funds in your account.

How Your HSA Is Funded

League City Contributions

If you enroll in the HDHP with HSA , you will receive an annual League City contribution of $1,500 for individual coverage and $2,000 for all other tiers into an HSA. This contribution is meant to partially offset the HDHP with HSA’s higher deductible.

Your Contributions*

There are several ways to contribute money to your HSA:

  • Pre-tax contributions through payroll deductions
  • After-tax cash contributions that are deductible when you file your taxes
  • Catch-up contributions up to $1,000 per year if you are over age 55 (until you enroll in Medicare)
Total Annual Contribution Limit

It is important to note that your contributions, when combined with any contributions from League City, may not exceed the IRS annual maximum of $3,550 for individual coverage and $7,100 for family coverage in 2020. Note: Individuals 55 and older may make additional “catch-up” contributions up to $1,000 each year until they enroll in Medicare.

*You must be enrolled in a qualified high-deductible health plan to contribute to an HSA.

Qualified Health Care Expenses

The HSA enables you to pay for the following qualified health care expenses on a tax-free basis:

  • Qualified medical, dental and vision expenses not covered by the plan, as defined by the IRS in Publication 502, available at www.irs.gov/pub/irs-pdf/p502.pdf
  • COBRA premiums
  • Qualified long-term care insurance and expenses
  • Health insurance premiums when receiving unemployment compensation
  • Medicare and, for those over age 65, retiree health insurance premiums (excluding Medicare Supplement and Medigap premiums)

HSA Restrictions

To be eligible to open an HSA and receive the League City contribution (if applicable):

  • You must be enrolled in an HSA-qualified high-deductible health plan (HDHP).
  • You cannot be covered by any other medical plan that is not an HSA-qualified HDHP.
  • You must not be eligible to be claimed as a dependent on another individual’s tax return.
  • You must not be enrolled in Medicare or TRICARE.
  • If you are a veteran, you must not have received veteran benefits within the last three months, except for preventive care.
  • You must not be active military.
  • You and your spouse must not have a health care flexible spending account (FSA).

Flexible Spending Accounts (FSA)

We provide you with an opportunity to participate in up to two different flexible spending accounts (FSAs) administered through Flores. FSAs allow you to set aside a portion of your income, before taxes, to pay for qualified health care and/or dependent care expenses. Because that portion of your income is not taxed, you pay less in federal income, Social Security and Medicare taxes.

Health Care FSA

Health Care FSA

For 2020, you may contribute up to $2,700 to cover eligible health care expenses incurred by you, your spouse and your children up to age 26. Some eligible expenses include:

  • Coinsurance
  • Copayments
  • Deductibles
  • Prescriptions
  • Dental treatment
  • Orthodontia
  • Eye exams/eyeglasses
  • Lasik eye surgery

Dependent Care FSA

Dependent Care FSA

For 2020, you may contribute up to $5,000 (per family) to cover eligible dependent care expenses ($2,500 if you and your spouse file separate tax returns). Some eligible expenses include:

  • Care of a dependent child under the age of 13 by babysitters, nursery schools, pre-school or daycare centers
  • Care of a household member who is physically or mentally incapable of caring for him/herself and qualifies as your federal tax dependent

FSA Rules

You must enroll each year to participate.

Because FSAs can give you a significant tax advantage, they must be administered according to specific IRS rules:

Health care FSA: Unused funds of up to $500 from one year can carry over to the following year. Carryover funds will not count against or offset the amount that you can contribute annually. Unused funds over $500 will NOT be returned to you or carried over to the following year.

Dependent care FSA: Unused funds will NOT be returned to you or carried over to the following year.

Life and AD&D Insurance

Life insurance provides your named beneficiary(ies) with a benefit in the event of your death.

Accidental death and dismemberment (AD&D) insurance provides specified benefits to you in the event of a covered accidental bodily injury that directly causes dismemberment (i.e., the loss of a hand, foot or eye). In the event that your death occurs due to a covered accident, both the life and the AD&D benefit would be payable.

Remember, it is important to designate beneficiaries for all of your insurance policies that require them. If you don’t, laws may cause death benefits to be distributed differently than you had planned, resulting in additional taxes and may unnecessarily delay the process of finalizing payment to your loved ones. You should regularly review and, if necessary, update your beneficiary designations.  You can update your beneficiaries at any time by logging into Benefit Connector (or by contacting Human Resources).

Basic Life and AD&D Insurance

Basic Life/AD&D (Company-paid)

This benefit is provided at NO COST to you through Mutual of Omaha

Your basic life and AD&D coverage amount: $100,000

Supplemental Life and AD&D

Supplemental Life/AD&D (Employee-paid)

If you determine you need more than the City-paid basic life/AD&D coverage, you may purchase additional coverage through Mutual of Omaha for yourself and your eligible family members.

Coverage Options

  • Employee: Increments of $5,000 up to $500,000, whichever is less; Guaranteed Issue of $200,000*
  • Spouse: Up to $250,000; Guaranteed Issue of $50,000
  • Child(ren): $10,000 or $15,000; Guaranteed Issue of $10,000

*During your initial eligibility period only, you can receive coverage up to the Guaranteed Issue amounts without having to provide Evidence of Insurability (EOI, or information about your health). Coverage amounts that require EOI will not be effective unless approved by the insurance carrier.

Disability Insurance

Disability insurance provides benefits that replace part of your lost income when you become unable to work due to a covered injury or illness.

Note: If you are enrolling for voluntary disability coverage as a late entrant, you will be required to submit Evidence of Insurability (EOI) before coverage is approved.

Short-Term Disability

Short-Term Disability (employee-paid)

Provided at an affordable group rate through Mutual of Omaha.

  • Benefit Percentage: 60%
  • Weekly Benefit Maximum: $1,250
  • When Benefits Begin: After the 7th day of disability
  • Maximum Benefit Duration: Up to 26 weeks

Long-Term Disability

Long-Term Disability (City-paid)

Provided at NO COST through Mutual of Omaha.

  • Benefit Percentage: 60%
  • Monthly Benefit Maximum: $6,000
  • When Benefits Begin: After 180 days
  • Maximum Benefit Duration: Social Security Normal Retirement Age (SSNRA)

Texas Municipal Retirement System (TMRS)

TMRS is a required retirement plan for all full-time employees. The following is a high-level overview of the plan:

  • TMRS contributions are seven percent of your pay.
  • The City will match your contributions two to one during retirement.
  • With TMRS retirement options, you are guaranteed a retirement check for the rest of your life.
  • No income taxes are withheld until you retire or terminate and request a refund.
  • You are vested after five years, which means you may leave your deposits with TMRS to continue to earn interest until you are ready to retire, even if you leave the City. You are eligible to
    retire if you have five years of service and are age 60 or over. However, if you have 20 years of service, you are eligible to retire at any age.

You can track your TMRS balance, view or change beneficiaries, update your address or phone number and more at www.tmrs.com.

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