VEBA

[fidgiegirl]

DH and I have $3000 in a VEBA, which is similar to an HSA but different. I'm not really sure how, to be honest, but don't so much care . . . we won't be choosing this plan combo in the future. I do know that we can carry the $3000 from year to year. We can also choose where we invest this money if we hang on to it.

My question: we have about $1500 in reimbursable expenses, but haven't submitted any. We were thinking of just letting the $3000 sit there for future needs. But I want to get started on paying off the mortgages, and the money would get us closer to that goal. That said, it wouldn't go directly onto the mortgage, it would go in our EF, and sitting there unreimbursed, it could be considered part of our EF anyway . . . hmmmm . . . that might be the way to think about it. Although I am not sure if I can submit this year's expenses after this year. At that point, what if our emergency is the roof or something? Then I can't get at the money. I suppose we COULD also take and put it right to the HELOC. It's already gone from our checkbook, so it would be like a small windfall if we took it in one big chunk from the VEBA and applied it over to the loan.

So I'm not sure if we should withdraw, or leave it be. Thoughts?

[shadowmoss]

If there is a possibility you couldn't submit this year's expenses later, why would you even consider not submitting them? Not sure I understand the issue...

[Simplemind]

I have one as well. I retired in June and I am leaving it as is. If for some reason my husband should lose his job and our medical benefits I would use this fund to cover them.

[jp1]

For me there would be a couple of considerations influencing my decision. First, you say you don't plan to do the VEBA plan again. If so then the account isn't' going to grow significantly or be of much future use to you. For me that would mean, "liquidate when practical and logical so that it's one less thing to be managed.". Second, I'm not familiar with these particular accounts but I assume you've already received whatever tax benefit that it offered, so leaving the money there won't confer any future additional benefit. Third, the money can only be used for healthcare expenses, and you currently have some. I would personally go ahead and use it, even though you have other resources available. By doing so, and then saving the other money in your EF, you've now freed up $1500 for additional emergency fund money, not limited to a specific type of expense. I really don't see any downside to using the VEBA money now.

[fidgiegirl]

Thanks all! You have given me good food for thought.

(shadowmoss, the monies can carry over from year to year, so we wouldn't lose them. We would just wait to see if we had future medical needs and fewer resources to cover them. But I like jp1's thinking. I think we'll go for a reimbursement.)