Medical Savings Account (MSA)
Medical savings accounts (MSAs) are one of two components that make up the Healthcare Fund program.
The purpose of MSAs are to help individuals, especially younger people, to save money to pay for future healthcare costs. It also provides an incentive for individuals to take ownership of their health as they save for higher healthcare costs in old age.
What Can I Use my MSA to Pay for?
Because MSAs are individual savings accounts, they are not intended to provide discount benefits as a social or commercial insurance. Rather, the 2.5% employee contributions and any voluntary MSA deposits are credited to your account and can be used to pay for a range of outpatient services.
Click on any of the following topics below for more information:
- Outpatient services at Belau National Hospital and MOH DispensariesOpen or Close
There are no changes to the way BNH charges its patients for outpatient services and prescribed medication. The same user fees still apply - based on the same MOH sliding fee scale.
If you have enough in your MSA to pay for your bill, then there is no out-of-pocket fee that you have to pay. If your MSA is not enough to pay for your bill, the remaining balance must be paid out-of-pocket.
If you have private health insurance and your bill is discounted to a minimal copayment, then you may use your MSA to pay for the copayment.
At this time, MSAs cannot be used to pay for services or prescribed medication at Public Health.
- Outpatient services at participating private clinics Open or Close
The following clinics currently accept MSAs at their clinics: 1) Belau Medical Clinic, 2) Family Surgical Clinic, 3) MH Dental Clinic, 4) Pacific Family Medical Clinic and Pacific Family Eye Clinic, 5) OpticVision Optical Clinic, 6) Torsten Schaudt Physiotherapy
There are two factors that affect how much money you can use from your MSA to pay for your medical bill at a private clinic. First, if a service or medication at a private clinic costs more than the same service or medication at the Belau National Hospital, then the patient must pay for the excess amount out of pocket.
For instance, if medication at a private clinic costs $20.00, but would only cost $5.00 at Belau National Hospital, then only $5.00 can be used from your MSA, while the remaining $15.00 must be paid for out-of-pocket.
This arrangement does not affect patients with private insurance. If you have private health insurance and your bill is discounted to a minimal copayment, then you may use your MSA to pay for the copayment.
The second factor is similar to how your MSA is used at BNH: If you have enough in your MSA to pay for your bill, then there is no out-of-pocket fee that you have to pay. If your MSA is not enough to pay for your bill, the remaining balance must be paid out-of-pocket.
- Co-payments for NHI-covered inpatient and referral cases
Patients with National Health Insurance (NHI) coverage are required to pay a copayment for their inpatient or referral treatment. You may use your MSA to pay for your copayment. If your MSA is not enough to pay for your copayment, then the remaining balance must be paid out-of-pocket.
The following table shows the co-payment ceiling for individuals, depending on household income:Annual Household Income$ 0 - $ 5,596$ 5,600 - $ 11,196$ 11,200 - $ 16,796$ 16,800 +Ceiling for Inpatient$ 200$ 300$ 400$ 400Example:
Total Bill: $ 4,000
20% of Total Bill: $ 800
Copayment Ceiling: $ 300
Patient must pay: $ 300Ceiling for Referrals$ 1,000$ 2,000$ 3,000$ 4,000Example:
Total Bill: $ 35,000
20% of Total Bill: $ 7,000
Copayment Ceiling: $ 1,000
Patient must pay: $ 1,000
- Private Health Insurance PremiumsOpen or Close
Individuals may authorize their MSA funds to pay for their private health insurance policies. They can either participate in this arrangement as part of their company (if the private insurance is employer-based) or as an individual. Payments to private health insurance carriers are made on a monthly basis.
If you decide to participate in this arrangement, please call or visit the Social Security office for more information. Please read the information below for other important details:
Deadline for Submitting New Authorization Forms or Changes to Current Authorization Forms
Any new authorization forms or changes to current authorization forms must be submitted to the SS office no later than the 15th of each month for that change to go into effect that month.
For instance, new authorization forms that are submitted before or on January 15th will be included in the end of January payables to an insurance carrier. Forms submitted between January 16 and February 15 will be included in end of February payables to an insurance carrier.
To ensure that sufficient balances are always available in your Medical Savings Account (MSA) to pay for the monthly amount so authorized by you so that you have continued and uninterrupted private insurance coverage, our office has implemented a quarterly hold on medical savings accounts for all those whose MSA Authorization forms have been approved and processed.Â
This means that if you authorized $10 a month starting in January 2015, your MSA will show a hold of $10 in January 2015, $10 in February 2015, and $10 in March 2015. Therefore, an amount of $30 will be held for the quarter, January to March 2015. In the event that the funds in your MSA are not enough to satisfy three months of authorized amounts, your balance will be negative and we will advise your accordingly.
When Making Additional Allotments
As a participant in this arrangement, you agree to be responsible for maintaining a sufficient balance in your MSA account.
The quarterly hold mentioned above ensures that your authorized amount is held at the beginning of every quarter. However, in cases where your MSA is not enough to pay the authorized amount to your insurance carrier, our system will indicate that your account has non-sufficient funds (NSF).
When that happens, you have the option of making a deposit to your MSA or authorizing an additional allotment through your employer. No payment will be made for anybody with an NSF and your name and payment are automatically dropped from the check due to the insurance carrier.
Withdrawals and Refunds from an MSA
Withdrawals from an MSA are not allowed. The money in your MSA is intended to finance your healthcare costs and are therefore available to you and your dependents/designated beneficiaries as long as you have available contributions.
Even upon death of a wage earner, the money will be available for use by a member of your family, or in the case of no living kin, to the administrator of your estate.
However, non-Palauan citizens are entitled to a refund of their own accumulated contributions from the medical savings accounts when they return permanently to their home country.
Click on any of the following topics for more information:
- Who is eligible to receive refunds?Open or Close
Only foreigners who are permanently exiting Palau may apply for refunds. If you have any dependents still remaining in Palau after your departure, you will not be eligible for a refund until your dependent shows proof that he/she is permanently exiting Palau. If you have any family members listed as designated beneficiaries, you must un-designate him as a beneficiary at the time you apply for your refund.
- What amount will I be able to refund? Open or Close
If you are a foreigner that is permanently exiting Palau, you are eligible to refund the remaining balance in your Medical Savings Account. However, if you have any unpaid medical bills, the SSA will deduct that amount from your total refund. No refund shall be made on any amount less than $5.00.
- When will I be able to receive my refund?
If approved, your refund will be sent to you six months after your date of departure. If you have any dependents still remaining in Palau after your depart, your money will be held until your dependent shows proof that he/she is permanently exiting Palau.
- What documents are required for me to submit?Open or Close
First, you must complete and submit a Request for MSA Refund form. You must also bring the following original documents: 1) Passport, 2) Departure Ticket, and 3) Employment Clearance provided by Division of Labor (or if a government employee, a copy of Personnel Action). The SSA staff will make copies of the above three documents. If you do not provide these documents, your request will not be processed.
- How will my money be sent?Open or Close
If approved, your refund amount will be sent to the mailing address you specify on the Request for MSA Refund form.
You may opt for the SS office to directly deposit your refund amount into your bank account. If your bank is within the United States banking system, the SSA will be able to directly deposit your refund at no cost. However, if your bank is outside the United States banking system, the SSA will deduct any processing fees incurred for wire transfers.
If an MSA Account Holder Dies
Upon the death of an account holder, the money in that account will first be used to pay any outstanding healthcare debt owed to a healthcare provider by the account holder or other beneficiary of that account for expenses incurred prior to the account holder's death.
Second, any amounts due to a healthcare provider incurred after account holder's death directly relating to the cause of his or her death shall be paid from that account. Any amount remaining from the employee's share shall be transferred to a MSA in the following order of priority:
- The surviving spouse;
- If no surviving spouse, then to the children, in equal shares; or
- If no children, then to the parents, in equal shares; or
- If no living parents, then to other designated beneficiaries, in equal shares; or
- If no beneficiary is listed, then to the persons entitled under the laws and customs of the last domicile of the deceased.