VEBA: A Different Value Proposition
Runaway health care spending is one of the most pressing challenges facing employers today. A main driver of this spending appears to be that health care consumers have become increasingly insulated from the true cost of their health care coverage. Traditional medical insurance plans do little to encourage a consumer-focused approach to health care spending.
Many public sector employers who want to reduce or moderate spending are exploring plan design changes that incorporate consumer-directed or higher deductible health plans. These plans provide comprehensive coverage by combining a high-deductible health plan (HDHP) with a tax advantaged health reimbursement arrangement (HRA) or a health savings account (HSA).
These new plan designs offer a promising solution to the problem of how to best achieve more cost-conscious employee decision-making as unspent funds carry forward to future years, encouraging employees to take ownership of their health care purchasing.
How it Works
A VEBA is a flexible, tax-free benefit solution that maximizes both the employer’s and employee’s interests. Unused VEBA funds roll over each year and can continue to gain earnings and interest. This allows the participant to build a savings reserve for future health care expenses.
The VEBA eliminates several steps in the process by streamlining administration. The result is a better user experience, increased visibility, and lower fees.
- Any deductible, any carrier
- Multiple investment choices
- Lower fees by streamlining administration
- Fast and convenient claims processing
- Experience you can count on