According to the announcement, the ING Health Reserve Account aims to help state and local governments fund their employees’ future health care expenses on a tax-favored basis – contributions, earnings, and reimbursements are all tax-free.
The program offers a menu of more than 100 investment options as well as a third-party recordkeeping solution to help simplify plan administration and 24/7 online account access. ING stated that the program also allows employers to set aside funds to reimburse employees in the future for qualified medical expenses, after they have retired or separated from service.
The enhanced product also now offers a flexible design that can accommodate two pre-funding vehicles – a voluntary employees’ beneficiary association (VEBA) trust or a governmental trust under IRC Section 115.
“By pre-funding their retiree medical savings plans through a health reserve account, employers may significantly minimize exposure to important, post-employment benefits while preparing employees for health care costs when they will most need this support,” said Brian Comer, president of Public Markets for ING U.S. Retirement Services, in the announcement.
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