Plan Information & Enrollment
VEBA Plan Brochure
The VEBA Plan brochure is an excellent educational tool if you are a newly-enrolling participant or just need a refresher. The brochure explains the benefits of a health reimbursement arrangement (HRA) and how you can use it.
When you become eligible to enroll, your employer will enroll you automatically, direct you to enroll online, or provide you with a Participant Enrollment Kit, which will include an Enrollment form.
PARTICIPANTS: Your participant account will be established after you have been enrolled and have received a contribution from your employer. We will then send you a welcome packet, which will include your participant account number, claims-eligibility date (if you are claims-eligible), investment allocation, a Plan Summary, and online registration instructions.
Paper participant account statements are mailed in January and July. If you are signed up for e-communication in lieu of paper (recommended), participant account statements are generated quarterly, and we will notify you via email when statements are available for online viewing. To sign up for e-communication, log in and click My Profile, contact our customer care center, or submit an Account Change form. Forms are available after logging in or upon request from our customer care center.
Your legal spouse and qualified dependents, including your young-adult children through the calendar year in which they turn age 26, are eligible for coverage. Generally, dependents must satisfy the IRS 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. These requirements are defined by Internal Revenue Code section 105(b). The IRS definitions supersede and may differ from state definitions.
Medical Care Expenses
Common medical care out-of-pocket expenses include deductibles, co-pays, coinsurance, prescription drugs, and certain over-the-counter (OTC) items. Eligible insurance premiums include:
Medical (includes marketplace exchange premiums that are not, or will not be, subsidized by the Premium Tax Credit);
Tax-qualified long-term care (subject to IRS limits; read Tax Qualified Long-term Care Insurance Premium Limits below);
Medicare Part B;
Medicare Part D; and
Medicare supplement plans.
Section 213(d) of the Internal Revenue Code defines qualified expenses and premiums, in part, as "medical care" amounts paid for insurance or "for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body…" Expenses solely for cosmetic reasons generally are not considered expenses for medical care (e.g. face-lifts, hair transplants, hair removal (electrolysis)). Expenses that are merely beneficial to your general health, such as vacations, are not medical care expenses.
Please note the following:
IRS regulations provide that insurance premiums paid by an employer, deducted pre-tax through a section 125 cafeteria plan, or subsidized by the Premium Tax Credit are not eligible for reimbursement. If requesting reimbursement of premiums deducted from your paycheck after tax, you must include a letter from your employer that confirms no pre-tax option is available.
If you or your legal spouse have a section 125 health flexible spending account (FSA), you must exhaust the FSA benefits before submitting claims to your HRA.
Claims for over-the-counter (OTC) medicines and drugs (except insulin and contact lens solution) must be prescribed by a medical professional or accompanied by a note from a medical practitioner recommending the item or service to treat a specific medical condition. Thus, OTC medicines and drugs, such as aspirin, antihistamines, and cough syrup, must be prescribed. The prescription requirement applies only to medicines and drugs, not to other types of OTC items such as bandages and crutches.
Tax-qualified Long-term Care Insurance Premium Limits
Premiums paid for tax-qualified long-term care insurance are eligible for reimbursement subject to annual IRS limits. The limits are indexed to inflation and are updated annually.
Coordination of Benefits
Read the information below to learn how your HRA coordinates with health flexible spending accounts (FSAs), health savings accounts (HSAs), and Medicare.
If you or your spouse has a section 125 health FSA, you must exhaust the FSA benefits before submitting claims to your HRA, which is a health reimbursement arrangement.
You can have an HRA (VEBA account) and an HSA, and you can use either your HRA, if claims-eligible, or HSA to reimburse your qualified expenses (no ordering rules). But, if you have a claims-eligible HRA and want to become eligible to make or receive contributions to an HSA, you must first elect “limited-purpose” VEBA Plan coverage. Only certain dental, vision, and orthodontia expenses are covered while coverage is limited. You can switch your HRA back to full coverage after you stop making or receiving HSA contributions (certain limitations may apply).
Only the types of expenses listed below are covered while your “limited” HRA coverage election is in force. All other expenses incurred while coverage is limited, including qualified insurance premiums, are not covered.
Standard dental care services (not related to a medical condition or accident), including dentures
Routine eye exams, contact lenses, and eyeglasses (excluding initial lenses and standard frames after cataract surgery)
Keep in mind that limiting your VEBA Plan coverage is not the only HSA contribution eligibility requirement. You should check with your HSA provider, but generally any adult can contribute to an HSA if they (1) have coverage under an HSA-qualified high deductible health plan (HDHP); (2) have no other first-dollar medical coverage (other types of insurance, such as specific injury insurance or accident, disability, dental care, vision care, or long-term care insurance, are permitted); (3) are not enrolled in Medicare; and (4) cannot be claimed as a dependent on someone else's tax return. Your maximum annual HSA contribution amount depends upon your HSA eligibility during the current calendar year. If you become HSA-eligible mid-year, a 12-month testing period may apply to determine your maximum annual HSA contribution.
If you are still working and either you, your spouse, or a qualified dependent are on Medicare, you may be required to use up your HRA before Medicare will provide future benefits unless:
You are separated or retired from the employer that made, or is making, contributions to your HRA;
Your HRA balance has always been and stays under $5,000; or
You have elected “limited-purpose” VEBA Plan coverage.
To avoid problems receiving Medicare benefits if you are separated from service or retired, contact our customer care center to make sure your separation/retirement date is on file. If you are still working and you elect "limited" VEBA Plan coverage, Medicare will provide benefits without requiring that you use up your HRA first. To elect "limited" HRA coverage, submit a Limited HRA Coverage Election form. Forms are available after logging in or upon request from our customer care center.
Premium Tax Credit (Subsidy) Eligibility
If you purchase insurance through a marketplace exchange and want to qualify for the Premium Tax Credit (subsidy), you should (1) read our Facts About Premium Tax Credit Eligibility handout; and (2) consider whether you will need to first use up, limit, or waive your VEBA Plan benefits. To get a copy of the Facts About Premium Tax Credit Eligibility handout, log in and click Resources, or request a copy from our customer care center.
The Plan Summary contains a question & answer section to help you understand and use your HRA, a summary of general plan information, and the following series of important notices:
Medicare Part D Notice of Non-Creditable Coverage
Coordination of Benefits with Medicare
Exemption from Annual Limit Restrictions
Premium Tax Credit (Subsidy) Eligibility
A copy of the Plan Summary is provided to all newly-enrolling participants with their welcome packets. To get a current copy, log in and click Resources, or request a copy from our customer care center.
Summary of Benefits and Coverage
As a participant in the VEBA Plan, the benefits available to you under the Plan, as well as any limitations, are important. To help you understand the types of benefits provided by the Plan and any applicable limitations, the Plan makes available a Summary of Benefits and Coverage (SBC), which summarizes important information about your benefits. Please note that the format and content in the SBC is required by federal regulation and is designed to apply to health insurance plans. Your HRA is not a health insurance plan. Therefore, the SBC indicates that some of the information and defined terms are not applicable to your HRA. To get a copy of the SBC, log in and click Resources, or request a copy from our customer care center.