Effective July 1, 2019, supplemental unemployment benefit fund balances of existing retirees or new retirees going forward will automatically be transferred into their HRA accounts.
Additionally, as some retirees could have a full HRA account, as well as a full SUB Fund account, the Trustees have voted to increase the HRA limit for retirees from $17,000.00 to $25,000.00.
For example, if a member had $8,000 in his or her S.U.B. Fund and had a full HRA account ($17,000.00) upon his or her retirement, the Plan would transfer over to this participants HRA account the $8,000.00. The new combined total of that retiree’s HRA account would then be $25,000.00.
Example #2: If upon retirement a member had $1,600.00 in his or her S.U.B. Fund account and $9,800.00 dollars in their HRA account, their S.U.B. Fund balance of $1,600.00 would be transferred to their HRA account which would subsequently total $11,400.00.
How does the transfer of the balance help a retiree?
Under the provisions of the S.U.B. Fund, retirees can only utilize S.U.B. Fund balances to offset self-payment premiums to the Health and Benefit Plan. However, by transferring a retirees S.U.B. Fund balance to that participants HRA Fund, those monies become more valuable as they can be used to not only pay for a participant’s Health and Benefit Plan’s self-pay premiums, but also for a whole slew of other medical expenses as permitted by the Internal Revenue Code.
Basically, it puts the retiree in the driver seat. They decide how and when they can use these monies.
What happens to the balances in my HRA account if I die?
Your surviving spouse inherits your HRA account. He or she may utilize those monies to continue making Health and Benefit Plan premium self-payments or pay for the out-of-pocket medical expenses as permitted by the Internal Revenue Code.
I am already a retiree and my monthly premium payments are automatically taken out of my S.U.B. Fund account, will this still occur?
Not automatically. As an HRA participant you are in the driver’s seat and you direct these monies to pay for any unpaid medical expense permitted by the Internal Revenue Code. So if you wish for some of these monies to offset the expense of a self-payment you can direct money out of your HRA account and make that payment. Or you can keep those assets available to offset other unpaid medical or dental expenses and instruct the Plan to deduct any self-payment automatically from your monthly Pension account or Bank account.
I don’t have an HRA account only a S.U.B. Fund account, what happens to me?
An HRA account will be automatically set up in your name. You will receive a full set of instructions as well as a set of Paylocity cards. Full instructions will follow under separate cover.