A Post Employment Health Plan (or VEBA) is a 501(c)9 plan under Internal Revenue Code that provides each eligible member with an individual account to pay health/dental insurance premiums and/or unreimbursed medical expenses after separation of employment with the City of Boise. These accounts are funded by the employer and it is the intention of the City to provide a target benefit. Employees who are eligible for this benefit include all non-contract, regular employees who are regularly scheduled to work twenty (20) hours or more per week.
How is VEBA Funded?
Based on an eligible employee's status on the last day of the last pay period in December:
- An employer contribution in the amount of 0.25% of the employee's annual base salary will be made in January.
- Eligible employees shall have accrued sick leave in excess of 600 hours converted into the employee's Post Employment Health Plan (VEBA) account. The conversion will be done on a 2:1 ratio at the employee's current regular hourly rate of pay. Conversion of hours shall occur at the end of the calendar year and shall be based upon the balances on the last day of the last pay period.
- When an employee who is eligible for this benefit retires, all accrued sick leave hours will be converted at a 4:1 ratio at the retiree's current regular hourly rate of pay. Vacation, and for non-exempt employees their compensatory time, will also be converted into the VEBA at retirement if the current Minimum Funding Standard is not met. Eligible employees, who separate from the City of Boise prior to retirement, will have no further contributions made by the City.
Minimum Funding Standards
The target benefit, or Minimum Funding Standard (MFS), represents the amount of funds necessary to pay for fifteen (15) years of single person Medicare supplement premiums after subtraction of the City's $50 per month contribution toward the premium. The premium amounts for the City-provided retiree Medicare supplement premium will be used to create the minimum funding standard calculation. Please see below schedule for MFS amount by year.
General Employee Minimum Funding Standard Estimates
Year of Retirement
The Minimum Funding Standard shall be updated periodically. It was last updated September 2006. The assumptions used to calculate the target benefit are as follows:
- Fifteen (15) years of single person Medicare supplement premiums.
- The premium used is the amount of the City of Boise's retiree Medicare supplement plan minus the $50 per month contributed by the City.
- Medical premium increases are estimated at 6.5% per year.
- VEBA investment earnings are estimated at 8% per year.
What Happens When I Leave The Organization
Whether you are leaving the organization through resignation, termination, layoff, or retirement you are able to access the funds in your VEBA account. In order to request reimbursement for health/dental insurance premiums and/or unreimbursed medical expenses after separation of employment with the City of Boise, register or log onto www.hraveba.org, email email@example.com or call (208) 972-8090 to obtain the appropriate form.