1214-S AMH APP MCLA2

SHB 1214  ‑ H COMM AMD  Adopted 3-18-91

     By Committee on Appropriations

    On page 2, after line 20, strike all material through line 6 on page 3 and insert:

    "(4) Pursuant to this subsection, in lieu of cash remuneration the state may, with equivalent funds, provide eligible employees with a benefit plan providing for reimbursement of medical expenses.  The committee for deferred compensation shall develop any benefit plan established under this subsection, but may offer and administer the plan only if (a) each eligible employee has the option of whether to receive cash remuneration or to have his or her employer transfer equivalent funds to the plan; and (b) the committee has received an opinion from the United States internal revenue service stating that participating employees, prior to the time of receiving reimbursement for expenses, will incur no United States income tax liability on the amount of the equivalent funds transferred to the plan."

EFFECT:  Authorizes a state VEBA, but only if the plan permits each employee to opt whether to receive cash or have the employer place the funds into a VEBA, and only if the Committee for Deferred Compensation receives an opinion from the IRS that employees would not incur income tax liability with respect to the transfer of their funds contributed to the VEBA.