VEBA Health Reimbursement Account
Help for Employees
Public employees everywhere are struggling to cope with the soaring cost of health care, particularly after retiring. Many who are eligible to retire keep working because their retirement pensions and other taxable retiree income sources aren't enough. The average 60-year-old public employee and spouse retiring today may spend well over $300,000 of their own money on health care expenses and insurance premiums during retirement! Fortunately, the Health Reimbursement Account (HRA) Voluntary Employees' Beneficiary Association (VEBA) plan can help.
HRA VEBA Details
Defined by the IRS as a health reimbursement arrangement (HRA), HRA VEBA is a type of health plan that reimburses qualified health care costs and insurance premiums for you, your spouse and qualified dependents. The funding source for Pierce County's HRA VEBA program is sick leave cash out upon retirement. Funds are deposited tax-free into participant accounts held by the nonprofit, tax-exempt HRA VEBA Trust, a VEBA authorized under section 501(c)(9) of the Internal Revenue Code.
- You pay no tax on contributions, earnings or withdrawals (claims).
- You can use your account anytime after it is opened.
- Your unused account balance carries over from year to year.
- You can invest your account among the available investment funds, including any one of four premixed portfolios.
The Voting Process
In 2009, Pierce County employees through their bargaining units or as part of a non-represented employee group began voting on whether to participate in the HRA VEBA program. Voting occurs every year between August-October for the following calendar year participation period. Qualified non-represented employees eligible to vote will be contacted through the Benefit department on the voting process. Participating bargaining units will conduct their own voting process and contact eligible employee each year within the August-October time frame. Results of each separate vote will be documented on an annual election confirmation form.