Following are member frequently asked questions and answers about a VEBA plan.

Q: What is the VEBA plan?

A: The Minnesota Service Cooperatives VEBA plan is a health reimbursement account that provides for individual, employer-funded accounts that you can use to help pay for eligible medical expenses. For active employees, the VEBA plan is used in combination with a high-deductible health plan. Funds contributed to the VEBA account are held in an irrevocable trust. Participation in the VEBA plan is limited to Minnesota public employers and their employees.

Upon retirement from public service, you, your spouse and dependents may be reimbursed from the VEBA plan for medical expenses, including premium contributions for Medicare Part B. Medical expenses reimbursed by the VEBA plan include the cost of deductibles, co-pays or coinsurance, and prescription drugs. When used for retirees, the VEBA plan is often funded with contributions from accumulated severance pay, sick pay and similar longevity-based benefits. Contributions may also be funded over the course of your employment.

The VEBA plan gives you more control over if, and when, you spend your health care dollars. You can spend your money to pay for eligible health care expenses now or in retirement. Contributions are made entirely by your employer.

Q: Who administers the VEBA plan?

A: The VEBA plan was created by the Minnesota Service Cooperatives. Your health plan is from Blue Cross and Blue Shield of Minnesota. MG Trust serves as the trustee for your VEBA account and SelectAccount administers your VEBA account and your VEBA Basic Investment Account.

Q: What does VEBA stand for?

A: A VEBA is a Voluntary Employees’ Beneficiary Association, which is an IRS-regulated, tax-exempt trust for funding health benefits.

Q: Who is eligible to participate?

A: To be eligible to participate in the VEBA plan, you must:

• Be an active employee or retiree of a public entity, such as a school, city or municipality
• Have a high-deductible health plan, if you’re an active employee
• Be in a bargaining unit that has agreed to offer the VEBA plan. If you’re not part of a bargaining unit, your employer must have a personnel policy regarding participation in the VEBA plan.

Q: Do all employees and retirees have to participate?

A: If your bargaining unit has adopted the VEBA plan, or if your employer has a personnel policy regarding participation, then you are required to participate if you elect coverage under your employer’s group health plan. You may not elect cash instead of a contribution to the VEBA plan. If your employer offers more than one health plan and you elect coverage under a plan that is not a high-deductible plan and that can’t be “paired” with the VEBA account, you cannot receive a contribution to the VEBA account from your employer.

Q: Do all bargaining units have to adopt the plan?

A: All bargaining units within an organization do not have to adopt the VEBA plan; however, all bargaining units must agree to adopt the same benefit plan. Individual bargaining units can negotiate their own contribution strategies and can move to the VEBA plan at any time.

Q: What does “crossover” mean?

A: Crossover is the convenient electronic reimbursement feature from Blue Cross that connects your health plan to your VEBA account and other reimbursement accounts that are administered by SelectAccount. If crossover is available to your group, and if you enroll in this feature, claims will be submitted electronically from your health plan to your VEBA account. This means you won’t have to file paperwork to receive reimbursement for expenses. You can add to this convenience by signing up for automatic deposit and allowing SelectAccount to deposit reimbursements directly into your checking or savings account.

Q: How do I get reimbursement from my VEBA account?

A: Your employer allocates money to your VEBA account. You can save that money or use it to pay for your portion of your eligible health care expenses, as determined by Section 213(d) of the Internal Revenue Code.

The way in which your claims are paid (also known as receiving reimbursement) will depend on whether you choose crossover.