In addition to the definitions found in 2-18-1303, MCA, the following definitions apply to this subchapter:

(1) "Contracting employer" means an employer who, as provided in 2-18-1310, MCA, has contracted with the department to participate in the plan.

(2) "Eligible to retire" means eligible for benefits from the employer's given retirement system.

(3) "Employee" means a person employed by an employer who is in a pay status at least 1040 hours each year, but does not include an independent contractor or person hired by the employer under a personal services contract.

(4) "Group" means a minimum of five employees employed by the same agency and identified as having common characteristics for the purposes of conducting a VEBA election vote.

(5) "HRA" means health reimbursement account. This is a tax-exempt account established for the payment of qualified health care expenses through employer contributions and investment earnings. The funds may be accessed only for the payment of qualified health care expenses, defined to include medical plan premiums, until the funds have been exhausted.

(6) "Separation from service" or "Separate from service" means the employee retires or otherwise has a termination of employment. The separation from service must be a separation from the employer. If the separation is a transfer to another agency or public entity, VEBA eligibility is based on the new group and its VEBA criteria. If the separation is a transfer to another agency or public entity without a VEBA plan, the employee would receive any remaining leave as provided by the employer's leave policy.

(7) "VEBA participant" means a former employee for whom employer deposits have been received by the Montana VEBA HRA and whose account has a positive balance.