AIG VALIC Launches HealthSecure HRA(SM); HealthSecure HRA(SM) Helps Group Retirement Plan Sponsors and Participants Effectively Manage Soaring Retiree Healthcare Costs.HOUSTON -- AIG VALIC VALIC Financial Advisors, a member of American International Group, Inc. AIG, is an insurance corporation that specializes in tax-qualified retirement plans, supplemental tax-deferred and after-tax investments. VALIC's headquarters are in Houston, Texas. , a national leading provider of retirement plan services to for-profit and not-for profit education, healthcare and government organizations, has launched AIG VALIC HealthSecure HRA HRA Health Reimbursement Arrangement HRA Health Risk Assessment HRA Housing and Redevelopment Authority HRA Human Resources Administration HRA Health Reimbursement Account HRA Housing Revenue Account (SM), a health reimbursement arrangement (HRA), to help public employers and their employees manage the growing cost of post-employment healthcare. Funded by the employer, HealthSecure HRA reimburses qualifying out-of-pocket healthcare costs and premiums for the employee/retiree, their spouse and IRS-qualifying dependents. All HRA contributions, investment earnings and withdrawals for qualifying expenses are free from federal taxes to employees and employers. "It's no secret that retirees everywhere are struggling to cope with increasing healthcare costs," said Bruce R. Abrams, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of VALIC VALIC Variable Annuity Life Insurance Company and the VALIC Retirement Services Company. "As insurance premiums and other health-related costs consume a growing portion of monthly pensions, many retirees are forced back to work to satisfy these growing obligations. Meanwhile, an alarming number of employees eligible to retire today cite the cost of health insurance as the primary reason why they cannot afford to retire. AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group VALIC's HealthSecure HRA addresses a market need that will continue to grow as the number of retirees in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. trends upward." "Other current alternative plans include health savings accounts A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. (HSAs) and flexible spending accounts flexible spending account, n an employee reimbursement account primarily funded with employee-designated salary reductions. Funds are reimbursed to the employee for health care (medical and/or dental), dependent care, and/or legal expenses and are (FSAs)," said Larry Stein, AIG VALIC's National Managing Director. "Unfortunately, HSAs must be coupled with a high deductible health plan A High Deductible Health Plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. It is sometimes referred to as a catastrophic health insurance plan. . And while FSAs provide significant tax advantages and have become quite common for predictable qualified expenses in a given plan year, they fall far short of meeting future funding needs due to their annual use-it-or-lose-it caveat. The HRA, on the other hand, provides an attractive alternative for the employees of employers that sponsor the HealthSecure HRA. All employees can be eligible and there is no automatic annual use-it-or-lose-it feature, meaning that in-service contributions can accumulate to offset post-retirement out-of-pocket qualified medical expenses." The main objective of an HRA is to provide a mechanism for employers to assist their employees with the pre-funding of a portion of the employee's healthcare expenses. Moreover, there are many benefits of using an HRA, as HRAs provide a great deal flexibility to the employer to tailor a health reimbursement arrangement to meet the specific needs of the employee. For example, HRA funds can be used to reimburse in-service and/or post-separation health care expenses, depending on the employer's plan design. Unused account balances carry over from year to year, and employees and employers both save all applicable Federal (and most states) payroll taxes Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. . All of these features combine to make HRAs an appealing solution for both the employer and employees. To offer the highest level of experience and service, AIG VALIC has teamed with HRA Consultants, a Division of VEBA VEBA Voluntary Employees' Beneficiary Association Service Group, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , which has more than 20 years of experience serving HRA and similar programs using tax-exempt trusts. Common HRA funding sources include lump-sum cash-outs (i.e., sick leave, vacation, etc.), unused monthly benefit dollars, mandatory group salary reductions (no individual elections permitted), longevity incentives, and other employer discretionary contributions provided for by collective bargaining agreements The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. , other written agreements or policy. It is important to note that although collective bargaining collective bargaining, in labor relations, procedure whereby an employer or employers agree to discuss the conditions of work by bargaining with representatives of the employees, usually a labor union. may be used to determine the amount and form of employer contributions, no individual employee may retain discretion over the amount or form of employer contributions made to an HRA on his or her behalf. Savings are available for employees whose final separation pay, such as sick and vacation pay, is placed into an HRA plan rather than paid to the employee as cash. For example:
HRA Leave Cash Out Tax Savings
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Cash Out 25% 7.65% Net
Amount Income FICA Amount
Tax Tax
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Taxable Wages $10,000 ($2,500) ($765) $6,735
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HRA $10,000 N/A N/A $10,000
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HRA saves $3,265 in taxes!(1)
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Below is an example of the federal tax savings attributable to a monthly payroll contribution:
HRA Monthly Payroll Contribution Tax Savings
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HRA Contribution Take-Home- Annualized
Monthly Tax Pay Tax
Savings(1) Difference Savings(1)
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$30 $10 $20 $120
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$75 $25 $50 $300
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$100 $30 $70 $360
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(1) Tax savings are approximate.
Investment Flexibility An additional benefit of the HealthSecure HRA is that it allows participants to direct the investments of their account balances from among 13 mutual funds. Employees can self-direct the investment of the HRA among any one or all of these funds and can change their investment fund allocation as often as once a month.
Growth of $100 HRA Contribution
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Starting Monthly HRA Account Value
Age Contribution at Age 65 (2)
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25 $100 $148,856
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35 $100 $81,870
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45 $100 $40,746
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55 $100 $15,499
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(2) Based on average annualized net earnings of 5.00%
This chart is hypothetical only, and does not reflect the return of any specific investment. Fees and charges, if applicable, are not reflected in this example and would reduce the results shown. Contact AIG VALIC at 1-800-448-2542 to learn more about the AIG VALIC HealthSecure HRA. AIG VALIC is one of the leading retirement plan services providers in the United States. For more than half a century, it has specialized in providing retirement programs and related investment, recordkeeping and administrative services to a variety of employer types, including for-profit and not-for-profit elementary and secondary education institutions, hospitals and healthcare organizations, higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. institutions and governmental entities. AIG VALIC serves 28,000 client groups and more than 2 million participant accounts. AIG VALIC is the marketing name for the group of companies comprising VALIC Financial Advisors, Inc.; VALIC Retirement Services Company; and The Variable Annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. Life Insurance Company (VALIC); each of which is a member company of American International Group
American International Group, Inc. (AIG) (NYSE: AIG; TYO: 8685 ) is a major American insurance corporation based in New York City. , Inc. American International Group, Inc. (AIG), world leaders For a list of heads of state, see . World leaders is a MMORPG. The game involves creating a state, joining an alliance and going into war. It is mostly played by players from Israel, China, USA, Britain, Brazil and Saudi-Arabia. in insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed in the U.S. on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and ArcaEx, as well as the stock exchanges in London, Paris, Switzerland and Tokyo. |
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