Medical expense plan for Washington State employees in general government agencies and higher education institutions

Growing cost of post-employment health care What is the VEBA Plan? – Tax advantages; key benefits – Getting money in; getting money out – Investment options About VEBA Trust Typical enrollment process Questions? Topics

Find your current age below: How much will you spend? Current Age

-403(b) IRA Other savings -Pension -Social -Security VEBA Plan How will you pay for it?

“Account-based” health plan Funded by employer Tax-free money for future health care costs What is VEBA MEP? Health Reimbursement Arrangement

Employees and employers Pay No Tax “Win-win” tax advantage

…pay no tax…can use your account anytime…choose your investments Key benefits You…

Key benefits …unused balance carries over—no annual “use-it- or-lose-it” …spouse and dependents are covered—even if you die Your…

Getting money in Compensable unused sick leave cash-out contributions at retirement No individual choice; all employee group members defined as eligible must participate per IRS rules.

VEBA MEP Keep more of your money You pay taxes and keep less You pay no tax and keep it all! SAVE up to 33% in taxes on contributions Taxable wages

Make your money last longer VEBA MEP Plan ( tax-free withdrawals) VEBA MEP may last over 40% longer than your tax-deferred investments Tax-deferred investments ( taxable withdrawals) $50,000 $0 Assumes each account (1) holds $50,000 at time of retirement; (2) is used to pay $500 per month for medical expenses; and (3) earns a 5% annualized investment return net of fees. Tax-deferred lasts 7.5 years VEBA MEP lasts 10.8 years

Six asset classes Build your own portfolio Option A: Do-it-yourself Four pre-mixes Professionally managed Option B: Choose a pre-mix Investment options

Getting money out You Spouse Dependent(s) Who’s covered? Deductibles Copays Prescriptions Expenses Medical, dental, vision Long-term care Medicare plans Premiums

Created in 1984; non-profit, tax-exempt Managed by board of trustees $135 million in assets 35,000 participants; 400 employers Operating costs 1.65% (+/-) annualized About VEBA Trust veba.org

25 years of experience Nationally recognized Plan consultant Onsite service Education Group adoption Technical support hraconsultants.org

Claims Eligible expenses Account information Investment changes VEBA101 ( ) Third-party administrator

Welcome packets Employer contributions Enrollment Group decision (vote) Education Typical enrollment process

Questions?

Use VEBA MEP to help cover your out-of-pocket health care costs – You pay no tax on contributions, earnings, or withdrawals (claims) – You self-direct your investments – You can use your account anytime – Your spouse and dependents are covered – Your unused account balance carries over Summary