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

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

Key benefits

You…

Key benefits

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 taxes and keep

less

You pay no tax

and keep it all!

You pay no tax

and keep it all!

SAVE up to 33% in taxes on contributions

Taxablewages

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.

VEBA MEP lasts 10.8 years

Investment options

Getting money out

• 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

1-800-422-40231-800-422-4023

Plan consultant hraconsultants.org

• Claims• Eligible expenses • Account information• Investment changes

1-800-VEBA101 (832-2101)

Third-party administrator

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