A VEBA is a tax-free medical expense account funded by the 25% sick leave cash-out upon your retirement from the UW. As a retiree, you and your eligible dependents can use it to pay medical expenses after your retirement. It is operated under rules established in the Internal Revenue Code (IRC).
You are eligible to participate in a VEBA if you accrue sick leave, and if your employee voting group approved participation. Those groups include:
Under IRC rules, a VEBA is implemented only if a vote by retirement-eligible employees in a voting group determines that a majority of those employees wish to participate in such a program.
If VEBA is approved in your employee voting group, participation is mandatory for everyone retiring in that group in the calendar year. See “Background” below for more information and a list of current participating groups.
When adopted by your employee group, your 25% sick leave cash-out at retirement funds a tax-exempt medical benefits plan.
If you are not covered by VEBA, you must pay federal income and FICA takes on your 25% sick leave cash-out payment at retirement. HB 2371 allows you to place an amount equal to your sick leave cash-out in a VEBA account without paying federal taxes.
As a retiree, your dependents eligible for payments from the plan include:
If you have a VEBA and are survived by your spouse or dependent children (or other dependents as defined by the IRS), they will continue to receive medical benefits until the account is used up. If there are no eligible dependents, the funds remaining in the account will be paid as medical benefits to the heir/s of your estate.
Visit the VEBA Trust website for more information including current earnings, forms, and contacts for additional questions.
Using these tax exempt monies, your VEBA could pay for out-of-pocket health-related expenses including:
HB 2371, passed during the 1998 Legislative Session, enables state agencies and institutions of higher education to offer eligible employees the option of using their unused sick leave cash payments at retirement to purchase a medical benefits plan.
At the October 15, 1999 meeting, the Board of Regents authorized the University to offer a VEBA-MEP (VEBA) to employees who earn sick leave.
UW Benefits conducted the voting process for the following employment groups:
All three employment groups polled accepted the VEBA, and it went into effect on December 1, 1999. In addition, all three groups voted that future re-votes will occur only if 5% of an eligible group requests it.
Labor unions representing WPRB-Classified and Contract-Classified Staff conducted their own votes and notified the UW of the results.
The following labor unions have accepted the VEBA, and unless noted otherwise, future re-votes will occur only if 5% of the unions' members request it.
The following labor union has not conducted a vote to date on the VEBA:
Retiree Insurance Topics
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