VEBA Service Group a Division of Gallagher Benefit Services, Inc.

1. VEBA Service Group a Division of Gallagher Benefit Services, Inc.

2. WASBO PPR Presentation Presented by: Brian Riehs▪ February 4, 2014

3. Introduction • Plan participation confirmation • Contribution instructions • Plan documents • Plan design change • Premium Tax Credit • Administrative reminders • General plan reminders • Common funding methods • See you at WASBO!

4. 12/20 was a busy email day! • Plan participation confirmation • Contribution instructions • Plan documents • Premium Tax Credit

5. Plan Participation Confirmation • New Employer Adoption Agreement • Plan Participation Confirmation form • Contributions will not be processed without first receiving either one of the above

6. Contribution Instructions • “001” for Standard HRA • “002” for Post-separation HRA • New Contribution Template • Old template no longer accepted

7. Plan Documents • Standard HRA Plan (Full Benefits) • Standard HRA Plan (Pre-Medicare Limited-Scope) • Post-separation HRA Plan (Full Benefits) • Post-separation HRA Plan (Pre-Medicare Limited-Scope)

8. Plan Design Change • Standard HRA Plan • For employees who are eligible to enroll in your qualified group health plan and • Are enrolled in or covered by your plan; or • Attest that they are enrolled in or covered by another qualified group health plan • Reimburses all qualified health care expenses (in-service and post-separation)

9. Plan Design Change • Post-separation HRA Plan • For all eligible employees, including those who do not qualify for Standard HRA Plan contributions • Reimburses all qualified health care expenses (post-separation only) • Claims eligibility suspended for re-hires during such re-employment period

10. Plan Design Change • Pre-Medicare Limited-Scope (law requires separate plan document) • Available option for Standard and Post-separation HRA participants who purchase coverage through an exchange and want to become eligible for the Premium Tax Credit • Irrevocable election until Medicare eligibility • Reimburses certain dental, vision, and long-term care expenses and premiums only

11. Premium Tax Credit • If a participant (or a family member) purchases coverage through a marketplace exchange and wants to qualify for the Premium Tax Credit first need to use up, limit, or waive their HRA (VEBA) benefits • Premiums for exchange coverage may be reimbursed; premiums subsidized by the Premium Tax Credit cannot be reimbursed • More information • www.irs.gov/uac/The-Premium-Tax-Credit • Facts About Premium Tax Credit handout available online • Participants received information in January 2014 Participant News

12. Administrative Reminders • No Form W-2 reporting • Use new contribution template • Use updated Memorandum of Understanding and Employer Policy language samples • Submit Plan Design Change Form to report new participating groups, funding method changes/additions, etc. • Fully complete EMPLOYER shaded box when submitting Enrollment Forms

13. Administrative Reminders • Don’t submit negative contributions; request a Mistake of Fact Notification form to correct contribution overpayments • Don’t discriminate; change percent-of-pay contributions to a uniform, flat-dollar amount • Operate under the 1990 “all or none” IRS private letter ruling; it is more conservative than the 1993 “excess sick leave forfeiture” ruling • Avoid small groups for VEBA purposes; voting groups should have a least five members

14. General Plan Reminders • New investment options effective October 2013 • PCORI fee (currently $2/year per participant) is required by federal health care reform; it is not an administrative fee • Legally-married, same-sex spouses now covered • Young adult children covered through end of calendar year in which they turn age 26

15. General Plan Reminders • HSA contribution eligibility requires limited-purpose HRA (VEBA) coverage • If still working and on Medicare, VEBA pays first (unless limited-purpose VEBA coverage is elected) • Participants who purchase medical coverage through a marketplace exchange and want to qualify for the Premium Tax Credit may need to first use up, limit, or waive their VEBA benefits

16. Common Funding Methods • Mandatory employee contributions • Sick leave cash out (retirement and annual) • Vacation, personal, other leave cash outs • Part or all of future pay raise or COLA • Contribution after electing lower-cost medical plan

17. See you at WASBO! • April 23-25 • Attend our presentations, including VEBA Basics on April 24 @ 1:20 p.m. • Stop by our booth!

18. Questions?