veba news & highlights save tax. keep more.. today’s topics what’s new? administrative...

VEBA News & HighlightsSave Tax. Keep More.

Today’s Topics

• What’s new?• Administrative reminders• VSG client consultant territories• What are other CTC groups doing?• HRAs and HSAs• Systematic premium reimbursements• Health care reform

Website Redesign

veba.org

Updated Forms

• Updated look and feel

• More user-friendly• Reorganized content• New Investment

Allocation Change Form

• Updated Enrollment Kit coming soon

Administrative Reminders

• Participant effective dates • Specify on Enrollment Forms• Default effective date is that date upon which both an

Enrollment Form and contribution have been received• Contribution remittance• Send contribution data reports timely• The lockbox is for paper checks only• Send contribution data reports to Meritain Health• Contribution data reports to the lockbox causes delays

and added cost to the Trust

VSG Client Consultants

What are other CTC groups doing?

• Early retirement incentives (ERIs)• Mandatory employee contributions• Sick leave cash out at retirement• Vacation, personal, other leave cash outs

Early Retirement Incentives (ERIs)

• Budget shortfalls are causing a growing number of governmental employers to offer incentives to encourage early retirement

Budget shortfalls

• Medical costs during retirement are a huge concern to employees

Retiree medical costs

• Generally, ERIs are a permissible VEBA funding source and can be a win-win solution for employer and employees

VEBA can be win-win

Mandatory Employee Contributions

• Per College policy or written agreement• No individual choice• Flat dollar amount• Move % of pay to flat dollar amount

VEBA eligibility criteria; contribution amount

• All eligible group members, if five or more• Contact VSG if less than five

Who typically votes?

Retirement Sick Leave Cash Out

• Must meet college’s definition of eligibility for sick leave cash out

Eligibility at retirement

• 25% of unused sick leave• No individual choice

VEBA contribution calculation

Vacation leave cash out

• Per College policy or written agreement• No individual choice• No classified unions

VEBA eligibility and contribution calculation

• All eligible group members, if five or more• All employee group members, if less than five eligible

voters

Who typically votes?

Coordination With HSAs

Contributions can be made to both, but To become eligible to make (or receive) contributions

to an HSA, you must elect limited purpose VEBA Plan coverage

Only certain dental, vision, and orthodontia expenses may be reimbursed while coverage is limited

Can file claims to either; no ordering rules

Can you have an HSA and an HRA? YES!

HSA Eligibility

An individual can make (or receive) contributions to an HSA if they Have coverage under an HSA-qualified HDHP

Have no other first-dollar, non-HDHP medical coverage (through self or spouse)

Are not enrolled in Medicare

Cannot be claimed as a dependent on someone else’s tax return

HSA Eligibility

HSA-qualified HDHP a health plan that meets the statutory requirements for annual deductibles and out-of-pocket expenses

First-dollar coverage provides benefits before an employee meets their deductible (e.g. coverage under a spouse’s health plan, general plan,

general purpose FSA or HRA coverage, etc.) Preventive care is OK

NOTE: HSA contributions must stop once an employee is enrolled in Medicare; the employee will keep the money in their HSA for future use.

AUTO DEDUCT

from pension check

DIRECT DEPOSIT

from VEBA to bank account

SIMPLE, EFFICIENT,

SECURE

Systematic Premium ReimbursementPEBB retiree medical

• Systematic Premium Reimbursement Form available online at veba.org

• Provides reimbursement to participants for qualified premiums only

• No direct payments to insurance companies or providers

Healthcare Reform

W-2 Reporting for HRAs not required• Do not report contributions or value of coverage on Form W-2• Value of health reimbursement arrangement (HRA) coverage

exempt from Form W-2 reporting until further notice• IRS Notices 2011-28 and 2012-9

PCOR Fee• New fee under healthcare reform• $1 per participant per year for current plan year; will go to $2

next year• Funds go to Patient-Centered Outcomes Research Institute

Pop Quiz

Can an employee have an HSA and then have their sick leave cash out go to VEBA when they retire? 1

Can VEBA pay HCA directly for PEBB retiree medical premiums? 2

Is W-2 reporting required for contributions to VEBA? 3

Questions