Open a VEBA Account
The VEBA is a great benefit! VEBA is an acronym for Voluntary Employees’ Beneficiary Association. Your employer deposits funds into a VEBA account, which is a tax-exempt irrevocable trust arrangement. It’s paired with a Health Reimbursement Arrangement (HRA) which allows you to use the VEBA funds for current or future out-of-pocket health-related expenses. The VEBA HRA doesn’t replace your group health insurance plan; it works with your plan to provide additional coverage options.
Your employer can contribute funds to help you, your spouse and eligible dependents pay for medical expenses even after your retirement. That’s pretty generous! Use your post-retirement VEBA funds to pay for certain medical premiums and long-term care premiums. Your employer can choose to make contributions throughout your working life or convert accumulated unused sick time, vacation, severance money, or other longevity-based benefits.
VEBA is a tax-advantaged account so you aren’t taxed on your employer’s contributions to it. Plus, your VEBA accrues interest that grows on a tax-free basis. Since VEBAs have to be used for eligible medical expenses, your distributions are tax free, too. Money goes in tax free, is invested tax free, and comes out tax free.
All medical expenses defined under IRS Code Section 213(d) are eligible under your VEBA HRA including:
- Co-pays, prescriptions, and deductibles
- Dental, medical, and vision services
- Medicare Part B and D
- Medical supplies and equipment
Because you’re enrolled in the VEBA HRA, you’ll receive the BPAS Benefit Card at no cost. It’s a quick and easy way to access your VEBA HRA funds.
It works just like a credit or debit card. When you use it at the doctor’s office or pharmacy, funds are automatically pulled from your VEBA HRA and paid directly to the healthcare provider. No more writing checks or paying cash.
Use your Benefit Card for qualified health-care expenses, like:
- Prescription drug co-pays
- Health plan deductibles
- Office visit co-pays
- Lasik surgery
- Eyeglasses/contact lenses
- Dental and vision services
Pay off your health care bills with the card too. Simply write the Benefit Card number on your statement for services you received in the plan year and send it to your health care provider. Then, send us a copy of the itemized bill from your provider or insurance carrier. (Sorry, it’s an IRS requirement.)