1. VEBA News & Highlights Save Tax. Keep More.

2. 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

3. Website Redesign veba.org

4. Updated Forms Updated look and feel More user-friendly Reorganized content New Investment Allocation Change Form Updated Enrollment Kit coming soon

5. 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

6. VSG Client Consultants

7. 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

8. 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

9. 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?

10. 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

11. 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?

12. 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!

13. 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

14. HSA Eligibility a health plan that meets the statutory requirements for annual deductibles and out-of-pocket expenses 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.

15. AUTO DEDUCT from pension check DIRECT DEPOSIT from VEBA to bank account SIMPLE, EFFICIENT, SECURE Systematic Premium Reimbursement PEBB 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

16. 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

17. Pop Quiz Can an employee have an HSA and then have their sick leave cash out go to VEBA when they retire? 1 1 Can VEBA pay HCA directly for PEBB retiree medical premiums? 2 2 Is W-2 reporting required for contributions to VEBA? 3 3

18. Questions