VEBA deduction
12-17-2006, 07:37 AM
#11
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Joined APC: Aug 2006
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Again, my question was "could somebody dumb it down in ENGLISH". I read the contract, just don't understand it.
A bud in the lounge said that the VEBA is for guys that are betweeen 53 and 60 so that they can get a credit card for healthcare spending. In essence, we (under 53) are paying for it. Don't know if that's the gospel or not.
I did not sign up for the medical deductions feature yet and that's why I am wondering what this VEBA is?
A bud in the lounge said that the VEBA is for guys that are betweeen 53 and 60 so that they can get a credit card for healthcare spending. In essence, we (under 53) are paying for it. Don't know if that's the gospel or not.
I did not sign up for the medical deductions feature yet and that's why I am wondering what this VEBA is?
12-17-2006, 07:40 AM
#12
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Joined APC: Jul 2006
Position: 767 Cap
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Originally Posted by Bitme
I looked at the VEBA and even signed up then cancelled it after flying with a pretty knowledgeable individual. The shortcomings I saw were that you could use what was int there, but that is a defined amount per month; so, what if your big expenses are in the beginning of the year and not much in the account yet?
Are you referring to a HCSA? VEBA has nothing to do with it for non-retired employees. My wife has one through the company (non-pilot) and at the beginning of the year she got a card (just like a debit card) with the full amount of the account available immediately. You can use the whole amount as soon as you get the card, and pay it off through the rest of the year. I got one, because I take lipitor, and it is a $50 copay monthly, under our prescription plan. Now, I can pay it with pretax money.
12-17-2006, 07:53 AM
#13
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Originally Posted by KnightFlyer
"With respect to pilots who retire on or after January 1, 2008 and their eligible dependents, the Retiree Group Health Plan shall provide solely for coverage for the retiring pilot and/or his eligible dependents for the period prior to their attaining Medicare eligibility age. The Association shall establish, sponsor and maintain a Post-Medicare Retiree Health Plan ("Post-Medicare Plan") and Voluntary Employees' Beneficiary Association (“VEBA”), to be effective January 1, 2008. Pilots retiring prior to January 1, 2008 who have attained Medicare eligibility age may, if eligible, elect coverage under the Post-Medicare Plan described in this Section 27.I., below. The Post-Medicare Plan and VEBA are collectively bargained for purposes of Internal Revenue Code Sections 419 and 419A.
3. The Company will make a lump sum contribution to the VEBA of $3.2 million, payable no later than November 30, 2006, with an additional $40 million contribution to be made to the VEBA no later than June 1, 2007.
As soon as practicable after October 30, 2006, but not later than January 1, 2007, the Company will contribute to the VEBA 50 cents of each paid credit hour for each pilot having a seniority list number (which would otherwise be paid to the pilot in cash) as the pilot's ongoing monthly contribution to the Post-Medicare Plan/VEBA. The Company shall remit such contributions to the VEBA no later than the 15th day of the calendar month following the calendar month during which the credit hours were actually paid. On the effective date of the Company’s contribution of 50 cents per paid credit hour, the hourly pay rates agreed upon for pilots will be established as book rates. Actual pay rates will be 50 cents less per hour. All retirement and welfare benefits based on pay will be based on pay determined under the book rates. The purpose of this provision is to allow the ongoing monthly VEBA contributions of 50 cents per paid credit hour to be funded out of compensation that would otherwise be paid directly to pilots in cash. Lump sum and monthly contributions will be placed in an interest-bearing escrow account until the VEBA is established."
3. The Company will make a lump sum contribution to the VEBA of $3.2 million, payable no later than November 30, 2006, with an additional $40 million contribution to be made to the VEBA no later than June 1, 2007.
As soon as practicable after October 30, 2006, but not later than January 1, 2007, the Company will contribute to the VEBA 50 cents of each paid credit hour for each pilot having a seniority list number (which would otherwise be paid to the pilot in cash) as the pilot's ongoing monthly contribution to the Post-Medicare Plan/VEBA. The Company shall remit such contributions to the VEBA no later than the 15th day of the calendar month following the calendar month during which the credit hours were actually paid. On the effective date of the Company’s contribution of 50 cents per paid credit hour, the hourly pay rates agreed upon for pilots will be established as book rates. Actual pay rates will be 50 cents less per hour. All retirement and welfare benefits based on pay will be based on pay determined under the book rates. The purpose of this provision is to allow the ongoing monthly VEBA contributions of 50 cents per paid credit hour to be funded out of compensation that would otherwise be paid directly to pilots in cash. Lump sum and monthly contributions will be placed in an interest-bearing escrow account until the VEBA is established."
12-17-2006, 09:40 AM
#14
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Originally Posted by Bitme
I looked at the VEBA and even signed up then cancelled it after flying with a pretty knowledgeable individual. The shortcomings I saw were that you could use what was int there, but that is a defined amount per month; so, what if your big expenses are in the beginning of the year and not much in the account yet? When the account does fill up you may not have a big medical expense and lose the amount at the end of the year. Weigh that against the tax savings which is in the 20 to 30 percent range of whatever you have in the VEBA and I wasn't willing to risk losing whatever was left versus the tax savings I may have saved.
I know everyones decision is personal, but for me it didn't make sense. If I had known monthly medical expenses it would have been a good decision for us.
I know everyones decision is personal, but for me it didn't make sense. If I had known monthly medical expenses it would have been a good decision for us.
12-17-2006, 01:05 PM
#15
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OK, I think we may be talking apples and oranges here (HCSA vs. VEBA) as I don't think Mawk90's original question (and mine) specifically regarding VEBA has been addressed. Having read Section 27 of the CBA, it would appear the VEBA is for retirees and/or those nearing retirement (53 or older).
Since I do not fall into either of these categories, I made no changes to any other benefit options and the "V" in VEBA stands for Voluntary, I'm curious about this new deduction from my paycheck. I'll give FDX Benefits and ALPA a call on Monday and post my findings here.
Perhaps I should have enrolled in the Legal Services Plan and had a lawyer interpret it for me.
Since I do not fall into either of these categories, I made no changes to any other benefit options and the "V" in VEBA stands for Voluntary, I'm curious about this new deduction from my paycheck. I'll give FDX Benefits and ALPA a call on Monday and post my findings here.
Perhaps I should have enrolled in the Legal Services Plan and had a lawyer interpret it for me.
12-17-2006, 01:14 PM
#16
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Posts: 1,306
Originally Posted by JB130
OK, I think we may be talking apples and oranges here (HCSA vs. VEBA) as I don't think Mawk90's original question (and mine) specifically regarding VEBA has been addressed. Having read Section 27 of the CBA, it would appear the VEBA is for retirees and/or those nearing retirement (53 or older).
Since I do not fall into either of these categories, I made no changes to any other benefit options and the "V" in VEBA stands for Voluntary, I'm curious about this new deduction from my paycheck. I'll give FDX Benefits and ALPA a call on Monday and post my findings here.
Perhaps I should have enrolled in the Legal Services Plan and had a lawyer interpret it for me.
Since I do not fall into either of these categories, I made no changes to any other benefit options and the "V" in VEBA stands for Voluntary, I'm curious about this new deduction from my paycheck. I'll give FDX Benefits and ALPA a call on Monday and post my findings here.
Perhaps I should have enrolled in the Legal Services Plan and had a lawyer interpret it for me.
Last edited by fdx727pilot; 12-17-2006 at 01:21 PM.
12-17-2006, 01:18 PM
#17
Organizational Learning
Joined APC: Nov 2005
Position: Directly behind the combiner
Posts: 4,948
[TOPIC=HeathCare Spending Accounts]
$250 in a year
It's actually $3,000 a year, or max deduction od $250 a month. It's a great beni we should all take advantage of.
The minimum is $250, the maximum $3000 -- both figures for a year. I signed up for the Max. My point was that most people will use $250 in a year, so why not use it tax free? (That's the advantage, it's pretax income.)
[/OFFTOPIC]
.
Originally Posted by Busdrivr
$250 in a year
It's actually $3,000 a year, or max deduction od $250 a month. It's a great beni we should all take advantage of.
[/OFFTOPIC]
.
12-17-2006, 01:29 PM
#18
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Joined APC: Nov 2005
Position: Directly behind the combiner
Posts: 4,948
[TOPIC=VEBA]
The way I read the contract, from the sections quoted above, every pilot (no matter what your current health care elections, or future intentions) will have a monthly $0.50 per credit hour deduction to fund the VEBA. My question is if it is out of the Section 3 pay rates, or does the Company raise the Section 3 rates by $0.50, then deduct that as your VEBA contribution.
I read it the same way. All pilots will contribute. I believe the 50 cents per hour comes out of the rates printed in the contract. I recall from the Briefings we got that the pay rates were negotiated with the extra 50 cents "built in."
So basically, from here on out, we are funding the VEBA for retirees out of our current pay. Kinda like our own personal medicare system! And, yes, only those 53 or older will get to use the VEBA, after retirement. It has nothing to do with an active pilot over 53, who can get a HCSA card under the new system. According to the road show, 53 and over is everybody who will probably retire under the current contract. Future retirees (younger than 53 now) will have to be negotiated at the next contract.
Our own medicare system that kicks in before we're medicare eligible. It will bridge the "gap" that exists for retirees that are not yet eligible for Medicare.
.
Originally Posted by fdx727pilot
The way I read the contract, from the sections quoted above, every pilot (no matter what your current health care elections, or future intentions) will have a monthly $0.50 per credit hour deduction to fund the VEBA. My question is if it is out of the Section 3 pay rates, or does the Company raise the Section 3 rates by $0.50, then deduct that as your VEBA contribution.
Originally Posted by fdx727pilot
So basically, from here on out, we are funding the VEBA for retirees out of our current pay. Kinda like our own personal medicare system! And, yes, only those 53 or older will get to use the VEBA, after retirement. It has nothing to do with an active pilot over 53, who can get a HCSA card under the new system. According to the road show, 53 and over is everybody who will probably retire under the current contract. Future retirees (younger than 53 now) will have to be negotiated at the next contract.
Our own medicare system that kicks in before we're medicare eligible. It will bridge the "gap" that exists for retirees that are not yet eligible for Medicare.
.
Last edited by TonyC; 12-17-2006 at 06:29 PM. Reason: speh-weeng :)
12-17-2006, 02:01 PM
#20
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Joined APC: Jul 2006
Position: A300 Captain
Posts: 257
Originally Posted by A300_Driver
The company preloads the HCSA account (debit card) at the beginning of the year and then pays themselves back with the monthly deduction. So you would have had all the money there at the beginning...the difficult part is trying to decide how much to put in!
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