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Employees who work for the state of Indiana have a new benefit: 401(h). Effective July 1, 2014, members applying for retirement can qualify for this benefit. Up to 225 unused vacation hours can be converted to a 401(h) account. This is a medical benefit account.
This account can be used for: prescriptions, health plan copayments, deductibles and coinsurance, vision services, eligible over-the-counter (OTC), and more.
Additional information on this benefit will be posted to this website as soon as available in January 2014.
A: In 2005, an Indiana law was passed allowing for a retirement medical benefits account. This account is for state employees who are members of the Public Employees’ Retirement Fund. The IRS approved the program in August of 2012. It is effective July 1, 2014, for members applying for retirement.
A: State of Indiana PERF-covered employees paid through the Auditor of State who are eligible for a full, unreduced retirement benefit. Effective July 1, 2014, members applying for retirement qualify for this benefit.
A: It is a pre-tax medical benefit account for retiring state of Indiana employees, their spouses and eligible dependents. It can be used for the reimbursement of medical expenses.
A: No. Monies in your 401(h) account can only be used for reimbursement of medical related expenses.
A: No, the program is not optional for retirees. If you are eligible for a full, unreduced retirement benefit and submit your retirement application, vacation time up to 225 hours will be converted to the 401(h) account.
A: Effective July 1, 2014, state employees who are eligible for, and have applied to receive a full, unreduced retirement benefit from the Public Employees’ Retirement Fund will have their vacation time up to 225 hours converted to a 401(h) account. Your application to retire must be received in order for the vacation to be converted to the 401(h) account.
A: If you left service prior to applying for retirement, it is likely that your vacation was paid out to you already. For more information, see 35 Indiana Administrative Code (IAC) 20-1-1, et seq.
A: Yes. Any vacation time from 0 up to 225 hours will be converted to a 401(h) account.
A: Vacation time up to 225 hours (or 30 days), will be converted. Sick leave, special sick leave, personal leave and compensatory time off are not eligible for conversion.
A: Divide your regular biweekly salary, as of the conversion date, by 75. Multiply that dollar amount by the number of hours to be converted.
A: If you do not apply for your full, unreduced retirement benefit from PERF at the same time you quit working, and your vacation time has been paid out, you are not eligible for the program. You will be subject to the rules found at 35 IAC 20-1-1, et seq.
A: If you are eligible, you are automatically enrolled. You will receive a Welcome Packet within 7 business days of your enrollment. This Welcome Packet provides you with details regarding your 401(h) account including how to access your account online. It will also include forms that will need to be filled out and returned to the claims administrator, or you will be able to add the information online.
A: The 401(h) account can be used to reimburse your spouse or dependents for their eligible medical expenses. Any amount that remains in the 401(h) account will be forfeited upon the death of the last covered person or when the retired employee’s dependents are no longer dependents. You will receive a beneficiary designation form with your Welcome Packet. Please be sure to fill it out and return it to the claims administrator or add the information through your account online.
A: A call center number and email address to contact for more information will be available from this web site in March.
A: Your 401(h) account will be put on hold until you retire again. The vacation that you accrue during your additional employment will not be converted to your existing 401(h) account.
A: Yes, your 401(h) account is available for you to use.
A: The funds in the 401(h) account earn interest at a current money market rate.
A: Yes. A monthly maintenance fee is deducted from your account at the beginning of every month while you have an account balance. If you choose to receive paper reports or other forms via mail, there will be an additional fee of at least $1.50. There will be no charge for email notifications. Once you are enrolled in the plan, details regarding any fees and reimbursements from your account will be available online.
A: You will have access to information regarding your account online.
A: You must complete and submit the appropriate reimbursement forms in order to be reimbursed. You can also avoid printing documents by submitting your claim through online claim submission. Reimbursement is by electronic funds transfer only. No paper checks are sent.
A: You will need to submit a reimbursement claim form along with an itemized receipt from an independent third party. The itemized receipt will need to include the following information: patient name, type of service, date of service, and patient responsibility.
A: Reimbursement forms are available online from the claims administrator. More information will be posted here when available.
A: 225 hours represents 30 days at 7.5 hours/day.
A: No. The 401(h) program is effective July 1, 2014.
A: Currently, there is no match with this program.
A: Yes, only your vacation leave is converted. Sick leave, special sick leave, personal leave, and compensatory time off are not eligible for conversion.
A: If you are eligible for the 401(h) program, then only 225 hours will be converted to the 401(h) account. For any vacation hours over and above the 225, you may be eligible for the Retiree Leave Conversion Program.
RETIREE LEAVE CONVERSION PROGRAM
The Retiree Leave Conversion Program (RLCP) extends compensation to include accrued but unused and uncompensated vacation leave in excess of the 225 vacation hours as well as sick and/or personal leave upon retirement. Calculation of benefits under this program will be based on leave hours available after the employee’s final paycheck has been calculated. The program permits eligible employees to receive a portion of accrued but unused and uncompensated leave up to a maximum of $5,000.00, if the established criteria are met in accordance with 31 IAC 4. Please visit http://www.in.gov/spd/2748.htm for additional information. You may also call 317-232-1167 or toll-free 877-248-0007 Monday through Friday from 7:30 a.m. to 5 p.m.
A: The 401(h) program is mandatory for some employers. It is optional for other employers. Currently, mandatory and optional employers are listed below.
Indiana Housing and Community Development Authority
INPRS (PERF members only)
White River State Park Development Corporation
Indiana Bond Bank
Indiana Board of Depositories
Indiana State Fair Commission
Indiana Finance Authority
Stadium & Convention Building Authority
Indiana Port Commission
Ivy Tech Community College of Indiana
Indiana State University
University of Southern Indiana
Ball State University
Northwest Indiana Law Enforcement Academy
This only applies to state of Indiana employees. This information is current as of 12/23/13.