Download to read offline
More Related Content
![12 Wealth Management Issues[2]](https://cdn.slidesharecdn.com/ss_thumbnails/12WealthManagementIssues2-123208922182-phpapp02-thumbnail.jpg?width=640&height=640&fit=bounds)
Similar to How to Add VEBA Plans to Your Production Portfolio
How to Add VEBA Plans to Your Production Portfolio
- 1. STRONGER together Strategies for success 2015 PartnerConference How to Add VEBA Plans to Your Product Portfolio David Ritchie, VP, VEBA Sales Gordon Goshong, CEBS, Account Executive
- 2. 2015 Partner ConferenceStrongerTogether Welcome • What is a VEBA • Current VEBA landscape • Starting the conversation • VEBA talking points • Questions
- 3. 2015 Partner ConferenceStrongerTogether Code Section 501(c)(9) Tax-Exempt Employee Benefits Trust VEBA Voluntary Employees Beneficiary Association
- 4. 2015 Partner ConferenceStrongerTogether What is a VEBA? • A tax-exempt irrevocable trust arrangement • Funds deposited by the employer on behalf of the employee • Funds may be used to pay for current or future out-of-pocket health-care-related expenses • Timing and ability to access funds always based on the bargaining agreement
- 5. 2015 Partner ConferenceStrongerTogether Rev. Rul. 2002-41 & Notice 2002-45 HRA Established June 2002 •Health •Reimbursement •Arrangement Individual Medical Reimbursement Accounts
- 6. 2015 Partner ConferenceStrongerTogether What is an HRA? • Account-based health plan • Participants use HRA funds to cover qualified health-care expenses and premiums • Employer contributions, earnings, and withdrawals (claims) are exempt from taxes
- 7. 2015 Partner ConferenceStrongerTogether Two Separate Pieces Must Work Together HRA • Rev. Rul. 2002-41 • Notice 2002-45 • Rev. Rul. 2005-24 • Rev. Rul. 2006-36 • Notice 2010-38 • Notice 2010-59 • Rev. Rul. 2010-23 VEBA • IRC Section 501(c)(9) • Funding Source for Participant Accounts
- 8. 2015 Partner ConferenceStrongerTogether Triple Tax Advantage Contributions Earnings Withdrawals Income Replacement Pension 401(k) 457 401(a) 403(b) IRA Roth Expense Management Health Savings Account (HSA) VEBA-funded HRA
- 9. 2015 Partner ConferenceStrongerTogether VEBA Characteristics • Separate legal entity —Irrevocable —Assets protected from creditors • Can fund Health Reimbursement Arrangement (HRA) individual accounts • Directed investments • Triple-dip tax-advantaged accounts
- 10. 2015 Partner ConferenceStrongerTogether What’s Possible with a VEBA? • Fund post-employment premiums and expenses ‒ Retiree Medical Savings Accounts • Embed with High Deductible Health Plan for active employees ‒ Consumer-Directed Health Care • Hold health care “reserves” for future medical expenditures ‒ GASB 45 Pre-funding ‒ Self-funded Plan Reserves
- 11. 2015 Partner ConferenceStrongerTogether Funding Sources • Fringe Contributions • Function of Future Wage Increases ‒ Bargaining groups only • Recapture Strategies ‒ Accrued Sick/Vacation Time ‒ Participation in High Deductible Health Plan (HDHP)
- 12. 2015 Partner ConferenceStrongerTogether Current VEBA Landscape • $36 million in assets • 6,000 participants • 2016 is looking strong
- 13. 2015 Partner ConferenceStrongerTogether Current Medical Plan $1,500/month $18,000/annually Health Insurance • Plan Design: — $500 Deductible — $20 Office Visit Copay — 80/20 Coinsurance — $2,500 Max Out-of-Pocket — RX 10/20/40
- 14. 2015 Partner ConferenceStrongerTogether New Plan $1,200/ month $14,400/annual $300/ month $3,600/annual Health Insurance Plan Design: • $1,500 Deductible • $30 Office Visit Copay • 80/20 Coinsurance • $4,000 Max Out-of-Pocket • RX 10/20/40 HRA VEBA Eligible Expenses: • Deductible • Copay • Coinsurance • RX Copays • Dental • Vision Rollover unused balances to use during your lifetime. Post employment premiums
- 15. 2015 Partner ConferenceStrongerTogether Talking Points With Stakeholders Public Entity Employer • Budget Crisis • Reducing Health Costs • Employee Accountability • Stabilization of Rates • Unfunded Liability Union Employees • Wasted Premium $$ • Post Employment Costs • Flexible Use • Investment Returns • Account Ownership
- 16. 2015 Partner ConferenceStrongerTogether Questions Thank you David Ritchie, VP, VEBA Sales Gordon Goshong, CEBS, Account Executive