Healthcare Reimbursement Accounts:
To VEBA, or not to VEBA

One of the biggest issues facing public employees today is paying for health insurance and related medical expenses such as prescription drugs during retirement. With medical costs rising two to three times faster than inflation, employees are facing the reality of approaching retirement age without enough dollars to cover their medical expenses.

As a result, more and more employees who are eligible to retire are "job-locked"; they simply cannot afford to retire because of rising health care costs.

One of the ways that employees can help plan for these expenses is through an employer sponsored healthcare reimbursement account. One of the most common of these plans is a 501(c) 9, Voluntary Employees Beneficiary Association (VEBA) plan.

In a VEBA, contributions are made on a before-tax basis, meaning that they are not subject to state or federal income taxes, or employment taxes. That immediate tax savings helps you to accumulate more dollars to fund health insurance and medical expenses in retirement.

In order to qualify for the tax savings, IRS regulations require all members of your group to participate in the program, and be subject to the same contribution formula.

There are many potential sources for the contributions. In addition to ongoing contributions, a group may elect to contribute dollars from unused sick, vacation or compensatory time. Contributed on a regular basis, these dollars can grow to a meaningful account balance at retirement.

Once you separate service, depending on the contribution formula, you may withdraw funds from the VEBA for health insurance premiums, including long-term care insurance, and/or qualifying medical expenses not covered by your medical, dental or vision plans. Additionally, unused benefits are rolled over from year to year for future expenses.

The examples below are hypothetical examples of accumulations over time using different contribution sources. Calculations based on an annual salary of $36,000 and an assumed rate of return of 8%. Actual investment results will vary.

For additional information on this or other retirement related programs such as 457 deferred compensation plans, 401a defined contribution retirement plans, DROP accounts, IRA's and annuity withdrawal rollovers, please contact:
Retirement Plan Advisors at 734-421-2212 or mmitchell@retirementplanadvisors.com.

Flashpoint
Summer 2008

Improper Setup of Aerial Ladders with a Locking Waterway
May Put Fire Fighters at Risk

NIOSH recommends that all fire departments utilizing aerial ladder trucks with locking (pin-anchored, lever actuated, clamped) waterways immediately take the following actions to reduce the risk of fire fighters being struck by unsecured waterways or parts of the waterway:

NIOSH is currently investigating an April 8, 2008 fire fighter line-of-duty-death that illustrates that adhering to manufacturer recommended setup procedures for aerial ladder operations is paramount to ensuring fire fighter safety.

Preliminary findings in this investigation suggest that some equipment designs do not provide secondary stops for the waterway on aerial ladders. Thus, failure to properly secure the waterway in the proper position can lead to catastrophic waterway failure and possible serious or fatal injury to fire fighters working in the area. The pin-anchored waterway design involved in this particular investigation is not limited to a single model or apparatus manufacturer. NIOSH is aware of at least 7 similar incidents that occurred in Delaware, Michigan, New Jersey, Texas, Virginia and Ontario without serious injury. Newer aerial ladder trucks may incorporate different types of anchoring mechanisms and/or a more fail-safe design but proper set up still needs to be verified before operation.

Circumstances of incident under investigation by NIOSH. On April 8, 2008, a volunteer Deputy Fire Chief (the Incident Commander) was killed when struck by a motorized water monitor and 30 feet of aluminum pipe that was "launched" off an elevated aerial ladder at a fire at an industrial manufacturing plant in Pennsylvania. The truck was normally transported in the "rescue mode" with the monitor pinned to the second section of ladder so that the waterway would not be in the way if the ladder was set up for rescue operations. At the incident scene, when the waterway was pressurized, the monitor and its support bracket, along with the last 30-foot section of pipe were "launched" off the aerial ladder by the force of the water pressure in the pipe. The monitor flew approximately 75 feet and fell, striking the Incident Commander on the head, killing him instantly. After the incident, the anchor pin was found on the ground, in front of the truck's cab. The waterway did not include any secondary mechanical stops to prevent the separation of the water monitor in the event the anchoring pin was not properly seated. The NIOSH Fire Fighter Fatality Investigation and Prevention Program is currently investigating this incident and a full report will be available at a later date.

NIOSH would like to bring this information to the attention of all U.S. fire departments and fire fighters who operate or work around aerial ladder trucks with locking (pin-anchored, lever actuated, clamped) waterways so that future occurrences of waterway monitor "launches" or the unexpected movement of the waterway monitor can be prevented. If secondary mechanical stops are present, the unexpected impact of the waterway monitor against the mechanical stop could cause structural damage to the aerial ladder and jeopardize the safety of any fire fighter standing on the aerial ladder. While not a contributing factor in the fatal incident, NIOSH reminds fire departments to comply with relevant federal regulations and NFPA standards for fire apparatus inspections and certification.

Flashpoint
Summer 2008

Fire Fighters Denied On-Duty Death Benefits

More than three years after the enactment of a law granting federal benefits to families of fire fighters, police officers, and EMT's who die of heart attacks and strokes on the job, not a dollar has been paid. The U.S. Justice Department has denied all 34 claims that have been decided, and has yet to act on more than 200 others.

The Hometown Heroes Act of 2003 stated that heart attacks and strokes on the job should be presumed to be line-of-duty deaths, making survivors eligible for federal benefits. A spokeswoman for the Department of Justice said the delays are caused by the complexity of the cases, not by any disagreement with the intent of the law.

The denials come to light as a new study published in the New England Journal of Medicine found that fire fighters are at much higher risk of heart attacks when fighting fires or responding to alarms. They face up to 100 times their normal risk of heart attack while working at a fire.

At least some of the denials were based on the Justice Department judgment that some of the duties the fire fighters were performing at the time of their deaths did not meet the law's requirement of "non-routine strenuous activity." Examples are a fire fighter who returned home after carrying fire hose at a training session who collapsed and died that afternoon, and a fire chief that died at home after directing traffic for more than an hour at a major intersection in the Texas heat.

The Justice Department rules for the program say that the program requires the fire fighter to be involved in a situation that would:

The Harvard study of 449 heart attack deaths among fire fighters nationwide found that 32 percent died when they were involved in fire suppression or other activity at a fire. But less stressful duties were associated with higher than expected risk of heart attack as well: 13 percent occurred while responding to an alarm; 17 percent in returning from an alarm; 13 percent in physical training; 9 percent in emergency medical services and other non-fire emergencies; and 15 percent in a fire station or while performing non-emergency duties.

Flashpoint
Summer/Fall 2007

NIOSH Recommendations in the Wake of Junior Volunteer
Firefighter Death

A tragic accident, which claimed the life of a 17-year-old female volunteer junior firefighter after the tanker truck she was riding in went off a narrow one-lane bridge in Alabama has resulted in a number of recommendations by NIOSH investigators:

The tanker was enroute to a structure fire and failed to negotiate a sharp curve at the approach to the bridge. The tanker crashed through the bridge's guardrail and landed upside down below the bridge. The driver and two other fire fighters riding in the tanker were injured in the incident. The victim was extricated by emergency personnel and pronounced dead at the scene.

Source: NIOSH Newsletter April 11, 2007

Flashpoint
Summer/Fall 2007

Guidelines can help communities prepare for terrorism

As the Homeland Security Office builds a national plan to protect the American public from terrorism, here are some ideas that you can pass along to businesses, agriculture and infrastructure organizations in your community to help them take steps now to prepare for terrorism and other disasters.

Any organization or business can become more secure by implementing measures on this list.

First, do the Hazard Assessment, at least a draft of an organizational emergency plan and a determination of what equipment and facilities will be used in emergencies. These products
will guide your deliberations on what training is needed by your personnel
e-mail - http://riskcenter.doe.gov/whatisrisk/index.cfm.

Encourage employees to enroll in FEMA and other emergency management courses
http://www.fema.gov/emi/index.htm.

Determine what elements of your situation are unique and/or not covered in the already available courses.

Conduct the Community Emergency Response Teams (CERT) Course at your site (see the CERT material listed on the emergency management courses page at http://www.fema.gov/emi/index.htm).

Key steps/considerations include:

Design your training so that: 1). every employee will react automatically in an emergency;
and 2). all employees assigned emergency response tasks know their responsibilities and
have the skills to do the job.

Personnel should also have a thorough understanding of the entire emergency plan and how they fit into it. To accomplish this, the training program should integrate each segment of training with the overall plan.