Retirees
Voluntary Employee Beneficiary Association (VEBA)

 

A VEBA is a tax-free health reimbursement account funded by the 25% sick leave cash-out upon your retirement from WWU. As a retiree, you and your eligible dependents can use it to pay qualified health expenses after your retirement. It is operated under rules established in the Internal Revenue Code (IRC).


Eligibility

You are eligible to participate in a VEBA if you accrue sick leave, and if your employee voting group approved participation. Those groups include:

  • Professional Staff
  • Classified Staff

Under IRC rules, a VEBA is implemented only if a vote by retirement-eligible employees in a voting group determines that a majority of those employees wish to participate in such a program.

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Eligible Dependents

Generally, dependents must satisfy the definition of Qualifying Child or Qualifying Relative as of the end of the calendar year in which expenses were incurred to be eligible for benefits under your VEBA plan. These requirements are defined by Internal Revenue Code § 152 and summarized below:

  • your spouse,
  • your dependent children, and
  • your other dependents as defined under the IRC.

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Participation

If VEBA is approved in your employee voting group, participation is mandatory for everyone retiring in that group in the calendar year.

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Contributions

When adopted by your employee group, your 25% sick leave cash-out at retirement funds a tax-exempt health reimbursement account.

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Unused Funds

If you have a VEBA and are survived by your spouse or dependent children (or other dependents as defined by the IRS), they will be able to use the remaining funds in the account for their eligible health care expenses. If you have no surviving spouse or dependent(s), any remaining funds will be forfeited and redistributed pro rata among the remaining participants from your employer.

NOTE: IRS Revenue Ruling 2006-36 does not permit the payment of benefits to non-dependent heirs in the event a deceased participant has no surviving spouse or dependent(s).

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Eligible Expenses

Using these tax exempt monies, your VEBA could pay for out-of-pocket health-related expenses including:

  • Medical Insurance Premiums
  • Dental Insurance Premiums
  • Vision Insurance Premiums
  • Medicare Part B Premiums
  • Medicare Supplement Premiums
  • Long Term Care Insurance Premiums
  • Long Term Care Medical Costs
  • Health Care Plan Copayments and Deductibles
  • Office Copays and Deductibles
  • Eyeglasses & Exams
  • Prescriptions/Prescription Copays
  • Air conditioning and air filters used for alleviating illness
  • Ambulance hire
  • Artificial limbs and teeth
  • Automobile modifications (hand controls, special equipment, mechanical lifts)
  • Birth control pills (with limitations)
  • Braille books & magazines
  • Drugs (prescriptions) and medical supplies
  • Elastic hose, medically prescribed
  • Fees:
    • Acupuncture
    • Anesthetist
    • Chiropractor
    • Christian Science Practitioner
    • Dentist
    • Diathermy
    • Exam, physical
    • Eye examination
    • Gynecologist
    • Healing Services
    • Hospital
    • Laboratory
    • Lip reading lessons for the deaf
    • Medical info plan
    • Nursing
    • Oral surgery
    • Orthodontia
    • Osteopath
    • Physician
    • Practitioners
    • Psychiatrist
    • Psychoanalyst
    • Psychologist
    • Physiotherapist
    • Sex Therapist
  • Weight Loss Program, where prescribed as a treatment for a specific disease
  • Food & beverages, for specific diseases
  • Halfway house residency
  • Hearing devices
  • Lifetime care at medical facility
  • Obstetrical expense
  • Oxygen equipment, rental of medical or healing equipment
  • Retirement home fees, costs allocable to med. care
  • Sanitarium or rest home
  • Seeing-eye dog & hearing-assisting cat (including maintenance)
  • Special television set to receive closed captions
  • Support or corrective devices (including special mattress and board for arthritis)
  • Telephone for deaf
  • Therapy treatments
  • Transportation expense relative to illness
  • Vasectomy
  • X-rays

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Resources

  • Visit the VEBA Trust website for more information including current earnings, forms, and contacts for additional questions. (click on the "Higher Education" box)
  • Retiring from WWU

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Page Updated 06.27.2013