- VEBA / 115 Trust: A tax-advantaged healthcare account funded by your employer that can help pay for eligible medical expenses now or in retirement.
- 401(h): A retiree healthcare account that helps set aside funds for future medical expenses during retirement.
- HRA: An employer-funded reimbursement account that helps cover eligible healthcare expenses.
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VEBA/115 Trust, 401(h), and HRA: FAQs
What is a VEBA?
VEBA is an acronym for Voluntary Employees’ Beneficiary Association. It is a type of trust used to hold plan assets for the purpose of providing employee benefits. VEBAs are authorized by Internal Revenue Code § 501(c)(9). Your VEBA is a health reimbursement arrangement (VEBA HRA) that allows your employer to contribute money to a trust on your behalf. You may use funds in the VEBA HRA to pay for eligible medical expenses now or in retirement. Unused funds roll over from year to year. And, you have the option to invest a portion of your unused funds in the market which is a great way to save for retirement.
Can I contribute to my VEBA?
No. IRS rules state that a VEBA must be funded only by employer contributions.
What is a 401(h)?
A 401(h) is a retiree medical benefit account that is set up within a defined benefit pension plan, a money purchase pension plan, or an annuity plan. The 401(h) provides for the payment of benefits for qualified medical expenses for retired employees, their spouses and dependents. It functions like a claims reimbursement account for medical related expenses.
Can I invest the contributions of my VEBA/115 Trust, my 401(h), or my HRA?
Investment capabilities are determined at the plan level, so it’s important to review your plan documents for further information. If your plan permits investment capabilities, log into your account and select Investments to review or update your options.
