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Healthcare Provider Update: Healthcare Provider for Duke Energy Duke Energy utilizes a range of health benefits and insurance plans provided through major healthcare organizations, with Aetna being one of the primary providers offering their employee health insurance coverage. Potential Healthcare Cost Increases for Duke Energy in 2026 As 2026 approaches, Duke Energy employees may face significant healthcare cost increases due to a combination of factors impacting the broader health insurance market. Record premium hikes for Affordable Care Act (ACA) marketplace plans, with some states eyeing increases exceeding 60%, could manifest in employer-sponsored plans as well. The potential expiration of enhanced federal premium subsidies, alongside rising medical costs and aggressive rate hikes from insurers, may significantly elevate out-of-pocket expenses for beneficiaries. This perfect storm of factors indicates that employees might need to prepare for substantial healthcare financial burdens in the upcoming year, as many individuals could see their premiums rise by more than 75%. Click here to learn more
'Duke Energy employees can benefit from understanding that strategies like a Section 351 exchange, charitable donations, and tax loss harvesting may work together to help manage appreciated stock efficiently while aligning with broader long-term financial goals.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.
'Duke Energy employees should recognize that thoughtful planning with tools such as Section 351 exchanges, gifting strategies, and tax loss harvesting can help them manage highly appreciated stock while supporting both personal and philanthropic objectives.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article we will discuss:
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How a Section 351 exchange can defer capital gains on highly appreciated stock.
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Alternative tax-efficient strategies such as charitable donations, tax loss harvesting, and gifting.
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The role of inheritance rules, step-up in basis, and combined approaches in long-term tax planning.
A Tax-Aware Q&A on How to Manage Highly Appreciated Stock
From the Section 351 exchange to other practical approaches, this Q&A addresses key considerations Duke Energy employees may encounter when dealing with highly appreciated shares.
Section 351 Exchange: The Fundamental Approach
Q: What is an exchange under Section 351?
A: Under certain circumstances, an investor may transfer property, such as highly appreciated shares, to a company in exchange for its stock under a provision of the Internal Revenue Code that allows the deferral of capital gains or losses.
Q: What is the primary advantage of exchanging my appreciated stock through a Section 351 exchange?
A: The main advantage is tax deferral. Gains transferred to corporations may be postponed under Section 351, though this applies only if specific diversification requirements are met, especially when transferring to investment companies like exchange-traded funds (ETFs).
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Q: What is meant by the “Control Test”?
A: The investor or group of investors who use their portfolio assets to fund the new entity must own at least 80% of the voting power and 80% of the total number of shares of all other classes of stock in the new company immediately after the exchange.
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Q: When seeding an ETF, how is the Control Test usually satisfied?
A: It is typically satisfied by either a single substantial investor making a significant asset contribution or multiple investors pooling assets to create a seeding pool for the ETF’s launch.
Q: What is the ultimate tax payment date for the deferred gain?
A: The deferred gain is recognized when the ETF shares acquired through the exchange are sold; distributions from taxable funds must also be reported in the meantime.
Other Tax-Efficient Techniques
Q: What is a straightforward method, aside from a Section 351 exchange, to sell highly appreciated shares without incurring large taxes?
A: Donating shares directly to a qualified charity is one option that some Duke Energy employees may benefit from.
Q: What tax advantages come with donating valuable stock to a charity?
A: Subject to holding period and adjusted gross income (AGI) limits, you can bypass capital gains taxes on the appreciation and may receive an income tax deduction for the stock’s full fair market value.
Q: What is a Donor-Advised Fund (DAF)?
A: A DAF allows you to donate appreciated stock, receive an immediate tax deduction, and then recommend grants to charities over time, while the assets in the DAF grow without tax impact.
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Q: Can I give a family member my appreciated stock as a gift?
A: Yes. In most cases, the cost basis from the donor carries over to the recipient.
Q: Why would I give a family member in a lower tax bracket appreciated stock?
A: If they sell the stock, the lower income could result in a reduced capital gains rate, potentially as low as 0% for long-term gains.
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Tax Loss Harvesting and Other Approaches
Q: What is harvesting tax losses?
A: Selling investments at a loss to offset gains from other sales is known as tax loss harvesting, a strategy sometimes considered by Duke Energy employees seeking opportunities to leverage bouts of market volatility.
Q: Can I deduct a certain amount of loss from my regular income?
A: Yes. If your capital losses exceed your gains, you can use up to $3,000 per year ($1,500 if married filing separately) to offset ordinary income, with remaining losses carried forward indefinitely.
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Q: What is a Qualified Opportunity Fund (QOF)?
A: A QOF provides investors with tax incentives for investing in tracts of land designated as 'opportunity zones'. Capital gains reinvested in a QOF within 180 days of being realized can be temporarily tax deferred, while QOF investments helpd for at least 10 years may confer a permanent capital gains exclusion.
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That said, 2025 legislation changes may prompt IRS updates to this rule.
Inheritance and Step-Up in Basis
Q: What is meant by a “step-up in basis”?
A: This adjusts an inherited asset’s cost basis to its fair market value at the time of the owner’s death, eliminating capital gains accumulated during their lifetime.
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Q: If I gift shares while living, will I receive a step-up in basis?
A: No. The original cost basis transfers to the recipient without adjustment.
Determining the Right Strategy
Q: What is the best course of action for me?
A: The most suitable approach will depend on factors such as your gain size, income level, charitable intentions, and liquidity needs.
Q: Do any of these strategies call for professional guidance?
A: Yes. Given the complexity of the tax code, working with a qualified financial advisor and tax professional is strongly recommended before implementing these strategies.
Q: Is it possible to combine these strategies?
A: Yes. For example, you might execute a Section 351 exchange on part of your portfolio for tax-deferred rebalancing while donating another portion to a DAF for an immediate deduction.
Q: Is there a loophole in the Section 351 exchange?
A: No. This is a legitimate tax code provision designed for corporate restructuring and adapted for use in the ETF market. It is intended for tax deferral, not permanent tax elimination.
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- Corporate Employees: 8 Factors When Choosing a Mutual Fund
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- Stages of Retirement for Corporate Employees
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- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
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Sources:
1. Kitces. ' Using Section 351 Exchanges to Tax-Efficiently Reallocate Portfolios With Embedded Gains ,' by Ben Henry-Moreland and Brent Sullivan. 12 Mar. 2025.
2. Kiplinger. “ A Donor-Advised Fund Can Give Your Charitable Giving a Boost ,” by Samuel Gaeta. 9 May 2024.
3. Internal Revenue Service. “ Topic No. 409, Capital Gains and Losses .” IRS.gov , 8 July 2025.
4. Wealth Enhancement. ' 6 Essential Tax-Loss Harvesting Tips ,' by Jim Wiley. 6 April 2022.
5. Congressional Research Service. ' Tax Incentives for Opportunity Zones ,' by Donald Marples. 26 Apr. 2022.
6. Investopedia. “ Carryover Basis: What It Is, How It Works, Gift Taxes ,” by Julia Kagan. 16 Jan. 2023.
How does the Duke Employees' Retirement Plan calculate benefits at normal retirement age, specifically for employees who reach the age of 65? In what circumstances might an employee consider retiring before reaching this age, and how would the benefits differ if they choose this option?
Benefit Calculation at Normal Retirement Age: Duke Employees' Retirement Plan calculates benefits for employees who retire at age 65 by applying a formula that includes 1.25% of their average final compensation for the first 20 years of credited service and 1.66% for any additional years. If an employee retires before 65, they can do so after age 45 with 15 years of service, but their benefits will be reduced based on how early they retire, resulting in lower payments due to a longer payout period.
What considerations should an employee keep in mind regarding their unused sick leave or carry-over bank hours when calculating benefits under the Duke Employees’ Retirement Plan? How does Duke utilize these factors to enhance an employee's credited service for the purpose of benefit calculation?
Impact of Unused Sick Leave and Carry-Over Bank Hours: Unused sick leave and carry-over bank hours are converted into additional credited service, which can enhance the calculation of retirement benefits. Employees who have accumulated these hours can see their credited service extended, leading to higher pension benefits at retirement.
In what situations would an employee's benefits under the Duke Employees' Retirement Plan be automatically paid in a lump sum? How does the Plan determine the value of benefits that fall below the threshold for monthly payouts, and what implications does this have for retirement planning?
Lump-Sum Payments for Small Benefits: If the value of an employee's benefit is $5,000 or less, Duke Employees' Retirement Plan automatically pays it as a lump sum. For benefits between $5,000 and $10,000, employees can choose between a lump-sum payment or a monthly pension. This can significantly impact retirement planning, especially for employees weighing whether to take a smaller upfront amount or spread it over time.
How does the Duke Employees' Retirement Plan handle benefit adjustments for employees who continue to work beyond their normal retirement age? What factors influence how these adjustments are calculated, and what implications might this have for future financial planning for employees nearing retirement?
Benefit Adjustments for Postponed Retirement: Employees who continue working beyond their normal retirement date will see their benefits increased annually (by no less than 10%) to account for the shorter period during which they will receive payments. The plan recalculates benefits based on the employee’s continued service and compensation after age 65.
What options are available to employees of Duke University regarding payment forms when they retire, and what are the long-term implications of choosing each option? How do these choices affect both the retiree's monthly income and survivor benefits for a spouse or other beneficiary?
Payment Form Options and Implications: At retirement, employees can choose various payment options such as a single life annuity, joint and survivor annuities, or a lump-sum payment. These choices affect the amount received monthly and any survivor benefits for a spouse or beneficiary. Employees should carefully consider their long-term financial needs and the needs of their beneficiaries when selecting a payment option.
What specific protections does the Duke Employees' Retirement Plan provide for spouses in the event of an employee's death, and how does this influence the choice of payment options? What steps must an employee take to ensure that their spouse's rights are upheld under the Plan?
Spousal Protections: The Plan provides protections for spouses in the event of an employee's death. A surviving spouse can receive 50% of the employee's reduced monthly benefit through a joint and survivor annuity. Employees must take steps to ensure spousal rights are protected by selecting the appropriate payment option and ensuring the necessary documentation is completed.
How can employees of Duke University ensure that they are informed about their rights under ERISA while participating in the Employees' Retirement Plan? What resources and tools does Duke provide to help employees understand and assert these rights?
Employee Rights Under ERISA: Duke provides resources for employees to understand their rights under ERISA, including access to plan documents and assistance in filing claims. Employees are encouraged to use Duke's available tools to assert their rights and ensure they are fully informed about the benefits available to them under the Plan.
In what ways can employees at Duke University navigate the complexities of reemployment after retirement, and how does their choice of retiree status affect their benefits? What regulations govern how benefits are recalculated if they choose to return to work at Duke?
Reemployment After Retirement: Employees who return to work at Duke after retiring can continue to receive their pension if they work fewer than 1,000 hours per year. However, if they exceed 1,000 hours, their payments will be paused and recalculated based on additional service and earnings when they retire again. This provides flexibility for employees considering reemployment after retirement.
What impact do legislative changes, such as those introduced by the IRS, have on the Duke Employees' Retirement Plan’s structure and benefits? How should employees approach understanding these changes in the context of their personal retirement strategies?
Impact of Legislative Changes: Changes introduced by the IRS or other regulatory bodies can impact the structure of the Duke Employees' Retirement Plan and its benefits. Employees should stay informed about these changes and how they affect personal retirement strategies, particularly regarding tax laws and pension calculations.
How can employees at Duke University contact the Retirement Board for questions or clarifications regarding their retirement benefits? What is the best approach for reaching out to ensure that they receive timely and accurate information?
Contacting the Retirement Board: Employees can contact Duke's Retirement Board for any questions or clarifications regarding their retirement benefits. The Retirement Board is responsible for managing the Plan, and employees are encouraged to reach out directly for timely and accurate information to address any concerns about their retirement.
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