Indiana HRA Plan Brochure

Save up Tax-free Money for Medical Bills A funded health reimbursement arrangement • Copays • Deductibles • Prescriptions • Dental • Vision • Orthodontia • Chiropractic • Medicare premiums • Retiree medical premiums ...and hundreds more IndianaHRA.com 7/23 PRC

Health Reimbursement Arrangement A health reimbursement arrangement (HRA) is a tax-free savings account for health care. This valuable employee bene昀椀t is funded with contributions from your employer. It’s easy to use, and it’s a smart way to save up for future out-of-pocket medical, dental, and vision bills, including retiree insurance premiums. Most HRAs allow you to submit claims and begin using your funds after you separate from service or retire (vesting may apply). These are “post-separation” HRAs. HRAs that allow you to submit claims while you’re still working are “in-service” HRAs. In-service HRAs are much less common. Once claims eligible, your HRA covers you, your spouse, and dependents, including your young adult children through the end of the calendar year in which they turn age 26. The Indiana HRA Plan is a health plan, but it is not insurance, and you do not pay a premium. How It Helps The Indiana HRA Plan helps put you in control of your healthcare expenses. Many participants use their HRAs during retirement to reimburse retiree insurance premiums and the cost of medical items and services they might not be able to a昀昀ord otherwise. This includes things like power chairs, hearing aids, expensive vision and dental care, and emergency medical bills. If you have an “in-service” HRA, you can save it up for retirement or use it now to help cover the cost of current expenses, such as doctor visits, prescriptions, new glasses or contacts, and braces for your kids. pg. 2

How It Works 1 1. Your employer sends tax-free money to your HRA. Often, these funds would have otherwise been paid to you as taxable income. In other words, you’re exchanging taxable income for tax-free money in your HRA—a much better deal! Your employer might also contribute funds in place of some other tax-free employee bene昀椀t. 2. You choose how you want to invest your HRA funds using the available fund lineup. 2 3. You can use your HRA funds after you separate from service or retire . As mentioned earlier, some HRAs can also be used during employment, but this is rare. HRA eligibility and funding are usually subject to collective bargaining or employer policy. Check with your employer if you need to know more about your group’s participation. Best Tax Advantage With an HRA, you get the best possible tax advantage—even better than tax-deferred 457, 403(b), and 401(k) plans with taxable withdrawals. y No taxes on employer contributions; y No taxes on investment earnings (if any); and y No taxes on claim reimbursements (withdrawals). This is sometimes called “triple” tax savings. You might save up to 30% or more, depending on your individual tax situation. With no tax bite, you get to keep a lot more for yourself! Tax savings includes state income tax, federal income tax, and FICA taxes (Social Security and Medicare). $100 Monthly Contribution Example $10,000 Lump-sum Contribution Example $0 $30 $50 $70 $100 $0 $3,000 $5,000 $7,000 $10,000 Taxable Income You lose Taxable Income You lose up to 30% up to 30% or more or more You keep You keep Tax-free Contributions to HRA 100% Tax-free Contributions to HRA 100% 1 Your HRA funds may be held in a voluntary employees’ bene昀椀ciary association (VEBA) trust, IRC Section 115 trust, or a combination of both, depending on your HRA plan design. VEBAs are authorized under IRC Section 501(c)(9). The term “VEBA” is sometimes used when referring to health plans that reimburse out-of-pocket medical 2 care expenses and premiums. These plans are actually HRAs, as de昀椀ned by the IRS. Many HRAs are subject to vesting, post-separation claims eligibility only, or other limitations depending on your employer’s plan design or any limited HRA coverage elections you may make. pg. 3

Investment Options You get to choose from a menu of available investment funds, kind of like your deferred compensation or similar retirement plan. Changes are allowed once per calendar month. You can get more information online, including our quarterly Investment Fund Overview and links to fund fact sheets and prospectuses. You should consult with a 昀椀nancial advisor and carefully read the fund fact sheets and prospectuses before making investment decisions. HRA Advantages HRAs have several advantages compared to health savings accounts (HSAs) and 昀氀exible spending accounts (FSAs). 1. Your HRA does not require coverage under a high-deductible health plan (HDHP). You can enroll in the medical plan of your choice. 2. Your HRA covers retiree medical premiums before and after age 65, including Medicare Part B, Part D, and supplement premiums. 3. There are no annual use-or-lose or carryover limits to worry about. All unused HRA funds roll over from year to year. 4. There are no IRS contribution limits. Contributions are usually determined by collective bargaining or employer policy. pg. 4

Medical Care Expenses Quali昀椀ed “medical care” expenses and premiums are de昀椀ned in Section 213(d) of the Internal Revenue Code. Several common examples are listed below. There are hundreds more. Expenses Premiums Copays Laser eye surgery Retiree medical, dental, vision Deductibles Eye glasses Quali昀椀ed long-term care Prescriptions Contacts (subject to IRS limits) Preventative care Hearing aids Medicare Part B Chiropractic Physical therapy Medicare Part D Dental care CPAP machines Medicare supplement plans Orthodontia Insulin TRICARE medical and dental Vision exams Emergency services For a more detailed list, log in at IndianaHRA.com and click Resources. Survivor Bene昀椀t If you pass away, your vested HRA balance can transfer to your surviving spouse and dependents who may continue using your HRA until it is exhausted. In the unlikely event you pass away with no eligible survivors, the executor or other representative of your estate can spend down your account by 昀椀ling claims for any unreimbursed medical care expenses you may have incurred prior to your death. Remaining fund, if any, after all 昀椀nal claims have been reimbursed would then be forfeited and re- contributed per the terms of the Indiana HRA Plan document or otherwise applied as directed by your employer. IRS Revenue Ruling 2006-36 does not permit the payment of bene昀椀ts to non-dependent heirs. pg. 5

Using Your HRA Managing and using your HRA is now easier than ever! We provide an e昀昀ortless online experience and several convenient services. y Handy mobile app, HRAgo® y Easy online and mobile claims submission y Convenient direct deposit for claim reimbursements y Automatic premium reimbursements for retirees y Secure quarterly e-statements Ready to 昀椀le a claim? Log in online and click Claims, or do it “on the go” with our mobile app, HRAgo. With HRAgo, you can quickly snap pics of supporting documentation and submit claims right from your mobile device. We’ll process your claim in about 昀椀ve to seven business days. Are you a retiree? We can automatically reimburse your monthly insurance premiums, including Medicare premiums. Just log in online, click Claims, and then click the Set up an Automatic Premium Reimbursement button. “I like being able to take pictures of documents with my phone and “ send them to you when I make a claim. Personalized Customer Care We work hard to provide you with top-notch service. If you get stuck or have a question, our friendly customer care team is ready to help Monday through Friday from 9:00 a.m. to 8:00 p.m. Eastern Time. Just call 1-888-711-9182. Live representatives answer 98% of all phone calls within 30 seconds. You don’t have to put up with annoying phone trees that get you nowhere. We’re here to take good care of you and your family! “I never have to wait very long, and the people are knowledgeable “ as well as courteous. I love talking to a human! More Information IndianaHRA.com Ask Questions 1-888-711-9182 pg. 6

Fees Your HRA is a group health plan. Plan administrative expenses include claims processing, customer service, account administration, printing, postage, legal, consulting, local servicing, auditing, etc. The fees charged to participant accounts to cover these costs vary from employer to employer and generally range from $0 to $20 per year per participant account (prorated and deducted monthly), plus an annualized asset-based fee of 0.38% to 1.00%. Your account value changes daily based on activity, which includes investment earnings or losses, contribution and claims activity, if any, and assessment of the asset-based fee. To the extent permitted or required by law, certain fees, assessments, or other amounts payable to the federal government may also be deducted from your account. Fund operating expenses vary by fund. These fees, along with historical fund performance, can be found on our quarterly Investment Fund Overview available online at IndianaHRA.com. Local Service & Plan Education Amy Cummings, Divisional Vice President Retirement Services | VALIC Financial Advisors Corebridge Financial 630 W Carmel Dr Ste 140 Carmel, IN 46032-9562 (317) 818-5900 or amy.cummings@corebridge昀椀nancial.com Customer Care Center Trustee Washington Trust Bank 1-888-711-9182 PO Box 2127 www.IndianaHRA.com Spokane, WA 99210-2127 Plan Sponsor HRA Administrator, LLC 221 N Wall St Ste 201 Spokane, WA 99201 ® Plan Consultant Download our mobile app, HRAgo , today! Gallagher 221 N Wall St Ste 201 Spokane, WA 99201 Securities and investment advisory services offered through VALIC Financial Advisors, Inc. (“VFA”), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements. VALIC, and VFA are members of American International Group, Inc. (“AIG”). American International Group, Inc. (AIG) is a leading global insurance organization. Founded in 1919, today AIG member companies provide a wide range of property casualty insurance, life insurance, retirement products and other 昀椀nancial services to customers in more than 80 countries and jurisdictions. pg. 7