ING's Retirement division announced today that it has launched the next generation of its retirement health reimbursement arrangement — the ING Health Reserve Account (ING HRA) — to help state and local governments fund their employees' future health care expenses on a tax-favored basis.

The latest HRA offering, which builds upon ING's existing strategy, provides an expanded menu of investment options and a third-party recordkeeping solution that helps simplify plan administration.

Retiree health care coverage is a valuable benefit for public sector employees, and many consider it to be an even more critical part of their total compensation package than ever before. However, with rising medical costs and tightening budgets, retirement health benefits represent unfunded liabilities that can strain public systems.

"As state and local governments face mounting pressure on their retirement systems, there is a growing demand for solutions that can help them better manage future benefits liabilities," said Brian Comer, president of Public Markets for ING U.S. Retirement Services. "By pre-funding their retiree medical savings plans through a health reserve account, employers may significantly minimize exposure to important, post-employment benefits while preparing employees for health care costs when they will most need this support."

ING initially developed its HRA program to help minimize the impact of government accounting standards — GASB Statements No. 43 and No. 45 — which require public employers to report future, post-employment benefit liabilities (other than retiree pension benefits) on their annual financial statements. These liabilities, however, and the long-term costs they represent may be offset in advance through various pre-funding strategies.

One way this can be done is with the ING HRA™, which allows an employer to set aside funds to reimburse employees in the future for qualified medical expenses, after they have retired or separated from service. A key benefit for employees is triple tax savings — contributions, earnings and reimbursements are all tax-free.

Among other features, the new ING HRA™ offers the following:

Choice among more than 100 investment options from leading fund companies. These include a fixed investment option with a guaranteed minimum crediting rate*, socially responsibly funds, and a variety of offerings by ING's fund manager, ING Investment Management.

Participant counseling services with one-on-one and group meetings.

A technology-driven, third-party recordkeeping solution that includes efficient claim processing and reimbursement services, a customer service call center, account statements and reports, and 24/7 online account access.

A flexible design that can accommodate two widely used pre-funding vehicles — a voluntary employees' beneficiary association (VEBA) trust or a governmental trust under IRC Section 115.

To learn more about the ING HRA™ program, contact ING at ING.HRA@us.ing.com.

Instant Insights /

ING launches enhanced retirement health reserve account program

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