VEBA Plan FAQ’s
These FAQs provide answers regarding Unified Fire Authority’s VEBA Plan.
Q: What is a VEBA plan, and what can it be used for?
A Voluntary Employees’ Beneficiary Association (VEBA) plan is a tax-exempt trust established to reimburse eligible medical expenses for employees and their dependents following retirement or separation from UFA. Eligible expenses include, but are not limited to, health insurance premiums, Medicare Part B and supplemental plans, and out-of-pocket costs for medical, dental, prescription, and vision care. Cosmetic procedures are excluded. A full definition of qualifying medical expenses can be found under IRS Code Section 213(d), Eligible Medical Expenses.
The VEBA plan is funded through contributions made by UFA on behalf of each eligible employee, as outlined below. For additional information, please visit IRS VEBA – 501(c)(9).
According to the 2024 Utah Retirement Systems (URS) Annual Report, the average retirement age for firefighters is 55.6, while civilians retire at an average age of 64.1. The VEBA plan serves as a valuable resource to help employees prepare for healthcare costs in retirement. Industry financial planners generally recommend that an individual retiring at age 65 have at least $150,000 saved for medical expenses, while a couple should anticipate needing approximately $300,000.
VEBA Fact Sheet Separated Employee Link
Q: What if an employee has Tricare, Medicare, or other coverage and won’t have medical expenses after separation or retirement?
When planning for retirement healthcare expenses, it is important to carefully consider pharmacy costs, as this is often where retirees realize the greatest benefit from their VEBA funds.
It is also essential to remember that Tricare and Medicare are not entirely cost-free. The Tricare website outlines applicable copayments and other out-of-pocket costs. Additionally, Medicare Part B premiums are not covered by Tricare.
For retirees on Tricare who begin collecting Social Security, the Medicare Part B premium is automatically deducted from their monthly Social Security benefit (if eligible). However, if a retiree chooses to delay collecting Social Security until full retirement age or age 70, they will instead be billed quarterly for their Medicare Part B premiums. In such cases, VEBA funds can be used to cover these expenses.
Q: How are funds contributed to VEBA?
UFA has four methods by which contributions can be made to the VEBA account:
- VEBA Contribution Per Pay Period
- As of January 1, 2022, UFA will contribute 2% each pay period of base pay into full-time employee’s VEBA accounts.
- Retirement Payout
- At the employee’s request, UFA may deposit all or a portion of the cash value of the vacation/sick leave payment into the employee’s VEBA account in accordance with the plan document in effect on the date of retirement.
- Separation Payout
- At the employee’s request, UFA may deposit all or a portion of the cash value of the vacation leave payment into the employee’s VEBA account in accordance with the plan document in effect on the date of retirement.
- Sick Leave Buyback Program
- Employees will continue to accrue sick leave once they reach their cap of 640 hours, for eligible 8-hour (day shift) non-firefighter employees or 960 hours for firefighter employees. Each year, any hours the employee has accrued above the established caps of 640 or 960 hours, as of January 1st, will be “purchased” by UFA at a rate established by the UFA Board of Directors by resolution. The current rate is 60% of the employee’s current rate of pay. The amount will be calculated by the March 25th payroll and deposited into the employee’s VEBA account, generally within two weeks. To take advantage of the time value of money, it is to the employee’s advantage to save sick leave and reach the “buyback” cap as early in one’s career as possible.
Q: Can an employee contribute to their VEBA Account?
No. Under IRS regulations, employees are not allowed to make direct contributions.
Q: How do employees know if they have funds in their VEBA account, and how can they review their statement?
The VEBA Board of Trustees has engaged APA Benefits (also referred to as The Trust Fund) as the third-party claims administrator for our VEBA plan. Through this partnership, APA Benefits manages the administration of all VEBA-related claims.
Both current and former employees with VEBA funds may access their individual VEBA account balances and transaction history by logging into their account through the APA Benefits online portal.
Q: When can employees use funds from their VEBA account?
VEBA funds become available immediately upon an employee’s separation from employment with UFA, whether through retirement, resignation, disability, separation, or termination. Additionally, there is no maximum limit on the dollar amount that may be requested for a one-time reimbursement of qualifying expenses from an employee’s VEBA account.
Q: How can separated employees use funds from their VEBA?
Upon separation from UFA, employees may submit qualifying medical expenses to APA Benefits for processing and reimbursement from their VEBA account balance. Additionally, employees will have a 720-day run out period after the end of each period of coverage to submit claims for the prior plan year.
Reimbursement requests can be submitted in the following ways:
- Manually
- By filing an online claim through the APA Benefits Portal
- By using the APA Benefits card for eligible expenses – IRS Code Section 213(d), Eligible Medical Expenses
- Downloading the app by searching “APA Benefits, Inc.”
Once the employee submits an online claim and it is processed, reimbursement will be issued either by check (mailed directly to the employee) or through direct deposit. To receive direct deposit, employees must provide the required banking information and supporting documents through the APA Benefits Portal.
Q: How can employees log in to their VEBA account for the first time?
For first-time users, go to the APA Benefits Portal. Select the “New User” option on the login screen. The employee will be asked to answer a series of security questions to verify their identity. Once they have successfully answered the questions, they will be granted access to create a unique username and password.
For users who have logged in once before, go to the APA Benefits Portal. Select “Existing User” and enter your username and password. If the employee has forgotten their login details, use the on-screen prompts to recover them.
If employees haven’t logged in within the past year, they will need to reset their password by contacting APA Benefits at info@apabenefits.com or 1-888-311-7478.
VEBA Claim and Login Instructions
Q: How do employees download the APA Benefits app?
Search APA Benefits, Inc. in Apple IOS or Android. Choose the “APA FA” app. Employees must login first through the website. Then login to the app using the same username and password. Employees can link their APA Benefits card to their mobile wallet.
Q: How long does it take for a separated employee to receive their benefits card?
Separated employees who previously participated in the UFA Flexible Spending Plan and already have a card will see their VEBA funds added directly to that card once they separate from UFA.
For employees who do not currently have a card, one will be mailed to their home address within 15 days of separation. Two cards will be issued—one for the separated employee and one for a spouse or eligible dependent. Please note, the card must be activated before use.
If additional cards are needed beyond the initial two provided, the separated employee may request another set through the mobile app for a $5 fee.
Q: Do employees pay taxes on the money UFA puts into their account?
No. Employees do not pay taxes on contributions to their VEBA account, nor is the money counted as part of their gross income.
Q: Do employees pay taxes on qualified withdrawals?
No. Employees will not incur taxes when withdrawing VEBA funds to pay for eligible medical expenses, as defined under IRS Section 213(d), for themselves, their spouse, or a tax-dependent. This is because both the contributions to the plan and any investment growth are tax-free when used for qualifying expenses.
Q: How are the VEBA funds invested?
The VEBA Board of Trustees has contracted with Outcome Private Wealth which handles the investment of the VEBA funds under the direction of the UFA VEBA Board of Trustees. The VEBA Trustees determine the Investment Policy Statement.
For investment purposes, all contributions are pooled together; however, each participant’s balance is maintained in an individual account for tracking and distribution purposes. Investment gains or losses are allocated proportionally at the individual account level. These results are posted quarterly and reflected in each participant’s online statement.
Q: Who sits on the VEBA Board of Trustees?
The VEBA Board of Trustees is comprised of the UFA Chief Financial Officer, Human Resources Director, Chief Legal Officer, and two full-time sworn UFA employees designated by the President of IAFF Local 1696. In addition, one UFA retired employee, one full-time UFA civilian employee, and two Chief Officers of UFA are designated by the UFA Fire Chief to serve as Trustees.
The current Trustees are:
- Trustee Board Chair – Assistant Chief Wade Russell
- Trustee Board Vice-Chair – Jeremy Robertson
- Trustee Board Secretary – Chief Financial Officer Tony Hill
- Human Resources Director – Kiley Day
- Chief Legal Officer – Brian Roberts
- Union Representative – Sean Brass
- Retiree Representative – William Brass
- Civilian Employee Representative – Sylvia Cardenas
- Chief Officer Representative – Assistant Chief Zach Robinson
Q: Why are funds pooled vs. being individually invested?
The VEBA Board chose to pool funds instead of individual investments because of cost savings, investment advantages, fiduciary risk, and outcome-focused vs. opportunistic investment strategy.
Cost Savings: Cost savings directly benefit every participant in the plan. By pooling the funds, the UFA VEBA can access economies of scale to reduce the plan’s individual participant expenses and the investment expenses associated with the funds.
Investment Advantages: There is truth in the saying that it takes money to make money. Pooling the funds gives the VEBA Board a much broader pool of investment vehicles to put the trust funds to work for the employees. Funds can be diversified into different instruments that are not available in a self-directed plan and access investments that would not be available to individual investors.
Fiduciary Risk: All trusts that benefit a group like the VEBA are governed by regulatory laws. By pooling the plan, the VEBA Board has been given access to professional money managers and fiduciary specialists who must benefit the employees of the trust before themselves, the department, and the UFA Board. This means every decision is guided not only by the VEBA Board, but also by professionals who have a legal obligation to look out for employees on the VEBA plan.
Outcome Focused vs. Opportunistic Investment Strategy: The pooled funds allow the portfolio to focus on achieving the most consistent returns possible. Unlike an individual retirement account that can focus on the biggest opportunity for gains and take the largest risk of loss; these funds are guided by an investment policy statement designed to outline the appropriate mix of assets to achieve the goal of making sure employees have the funds to support their retirement medical expenses after separation with UFA.
Q: Do employees pay an Administrative Fee?
For employees participating in UFA’s group health plan or cafeteria plan and retirees participating in UFA’s group health plan, a $0.95 monthly administrative fee is withdrawn from their account.
For employees who do not participate in UFA’s group health plan or cafeteria plan, as well as for separated employees, a $4.00 monthly administrative fee is applied and withdrawn from their account.
Q: If employees still have money in their VEBA account and they pass away, what happens?
An employee’s spouse or eligible dependents may continue to utilize the VEBA account for tax-free reimbursement of qualifying expenses in the same manner as the employee.
If an employee passes away without a surviving spouse or eligible dependents, any remaining balance in the account will revert to the VEBA Trust for equal redistribution among participants or to offset expenses for the participants, as determined by the Board.
Under IRS regulations, VEBA funds cannot be willed, gifted, or transferred to individuals outside of eligible survivors. Reimbursements may only be made to a spouse or dependents for qualifying expenses as outlined above.
For the purposes of this plan, a dependent is defined in accordance with the current UFA Group Health Plan.
Q: How can employees access VEBA financial reports?
Employees can access VEBA financial reports by logging into the APA Benefits Portal, clicking on “Tools & Support,” and the reports will be listed under “Documents & Forms”.
