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By Greg Cieslewicz
When planning for retirement, one of the challenges is the cost of health insurance and medical expenses.
Starting July 1, the WEA Trust has a new solution to help school districts and employees manage post-employment health care expenses. It’s called TrustSecure, a group-bargained benefit used by employers to make tax-exempt contributions on behalf of eligible employees.
How it works
The employer contributions are invested in a Trust-managed group investment account. TrustSecure is designed so the funds in the account accrue on behalf of the employee, and all contributions, earnings, and distributions are 100% tax-exempt.
Different than an HRA
The commercial version of plans similar to TrustSecure is referred to as a health reimbursement account (HRA). With an HRA used to fund post-employment medical expenses, the employer has many fiduciary responsibilities.
With TrustSecure, the WEA Trust is responsible for the fiduciary role of the plan. The funds in the plan are available to the employee if he or she leaves employment or as defined in the collective bargaining agreement.
Participants who leave employment, retire, or are disabled are eligible to request reimbursements from their accounts to pay for qualified medical expenses. Because of Internal Revenue Service rules, the money can never be taken as a cash withdrawal.
Other TrustSecure advantages
To learn more about this plan, contact your WEA Trust field representative.
Posted June 17, 2008