Tribes can implement numerous tax-free programs that address the specific needs of their members.
American Indian tribes are searching for ways to better utilize discretionary funds from tribal gaming and non-gaming enterprises. Through the Tribal General Welfare Exclusion Act of 2014, a Tribal Member Benefit Program (TMBP) helps tribes fulfill their objectives of caring for tribal members and improving their quality of life.
TMBPs may include, but are not limited to:
- Utility and Housing Programs – mortgage payments, down payments or rent payments (including but not limited to security deposits) for principal residences, enhancing habitability of housing, basic repairs or rehabilitation, paying utility bills and charges, etc.
- Health Care and Other Qualifying Programs – health care (medical care), childcare, transportation for obtaining services at medical facilities, meals and lodging when receiving medical care away from home, relocation and shelter, cost of nonprescription drugs, transportation to the grocery store, etc.
Click to read details about the Tribal General Welfare Exclusion Act of 2014.
The Tribal General Welfare Exclusion Act of 2014 (GWE) allows American Indian Tribes to establish benefits and programs to care for their tribal members. The GWE enables tribes to create non-taxable programs to address their unique social, cultural and economic needs. In developing these programs, tribes give significant consideration to individual member needs as well as the needs of the entire community.
With the passage of the GWE, tribes are now empowered to create benefit programs that can change the lives of their members. As tribes look to improve the health, education and welfare of their members, the GWE provides tribes with the following opportunities:
- More structured approach for funding member needs.
- Benefits that are not lavish or extravagant that are designed to meet the basic needs of all members.
- More control of benefit dollars and better management options for benefit costs.
- Benefits provided are non-taxable.
How can a tribe fund a Health Benefit Program or Utility Benefit Program?
- Discretionary funds from Tribal gaming
- Discretionary funds from non-gaming enterprises
- Members allocate funds provided through the tribe
- Provide additional dollars through the Tribal budget
What is the benefit to members?
- MBP dollars are not reported on a 1099 form at year end
- MBP dollars are tax-exempt for members
Example of Funding & Member Savings
- Tribe provides $10,000 per member for tribal member benefits in lieu of per capita payments
- Funds are directed into the tribally sponsored HBP, UBP or other programs that meet the needs of the member
- $10,000 of member benefits would be tax-exempt
- Member could use up to $10,000 of benefits
- At a 25% estimated tax rate, the member saves approximately $2,500 in taxes
- $10,000 x 25% = $2,500
- The $10,000 is not reported on a 1099 form at year end
- The member tax advantage is that if the $10,000 was distributed as a per capita payment then the full amount would be reported on a member 1099 form
- The member would pay $2,500 in taxes and only receive $7,500 in a per capita payment
- The specific needs of the member may be better met with the HBP, UBP or other programs
- The HBP, UBP or other programs allow the member to better utilize the funds that are provided through the tribe by not paying taxes on the $10,000 amount
- The HBP, UBP or other programs are non-taxable and can assist members with paying for certain health care expenses.
DBS TMBP Administration System
DBS has developed and owns a federally registered and trademarked proprietary administration software system. The system has been in use for over 10 years and is known as the “Advanced Strategic Administration Program” (A.S.A.P.®). This advanced system has helped position us as an industry leader in account-based benefit plan administration that includes Tribal Member Benefit Programs (TMBPs).
Our TMBP administration platform includes enhancements resulting from the passage of the Tribal General Welfare Exclusion Act of 2014 (GWE). The GWE allows American Indian tribes to establish benefits and programs for members differently than in the past. The GWE enables tribes to create specific tax free programs that allow tribes to help fulfill their objectives of caring for tribal members and improving their quality of life. The GWE also allows tribes the opportunity to evaluate how benefits are provided for the health, education and general welfare of members.
DBS TMBP Program Services
- Federally registered and trademarked A.S.A.P.® software system owned and developed by DBS
- Program implementation and completion of a Program Design Guide
- Provide sample policies and procedures
- Plan document services available
- Member online, paper or electronic enrollment with verification procedures per the tribe
- Online enrollment entry for members or tribal benefits representatives
- Provide a nationwide debit card network for health care payments
- Reimbursement to members via check or direct deposit
- Premium payment schedule feature which allows members to have premium payments made directly to providers for Medicare supplement, private health insurance or exchange health coverage
- Online reports for administrative users
- Online access for tribal members
- Dedicated Claims Specialist team
- Knowledgeable customer service team
- First in the nation for comprehensive TMBP enrollment and administration
- Program design customized for American Indian tribes
- Premium payment schedules based on each tribal member's payment frequency that allows for automatic premium payments directly to Exchange, private or Medicare Supplement carriers
- Payment schedule services available for housing mortgage and other selected programs
- Established the first unique nationwide card network that includes utility providers for Tribal UBPs
- Registered and trademarked software administration system developed and owned by DBS
- Claims and customer service teams that understand the needs of tribal members