Voluntary Employee Beneficiary Association
A voluntary employees' beneficiary association (VEBA) under
Internal Revenue Codesection 501(c)(9) is an organization organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries if no part of the net earnings of the association inures to the benefit of any private shareholder or individual.
The organization must meet the following requirements:
1. It must be a voluntary association of employees;
2. It must provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose; and
3. Its earnings may not inure to the benefit of any private individual or shareholder other than through the payment of benefits described in (2) above.
Membership of a section 501(c)(9) organization must consist of individuals who are employees who have an employment-related common bond. This common bond may be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. However, if the organization is part of a plan maintained under a collective bargaining agreement between employee representatives and employers, and such plan was the subject of good faith bargaining between such employee representatives and employers, the plan need not meet such nondiscrimination requirements for the organization to qualify as tax exempt.
A major use of the concept was implemented in 2007 when the UAW agreed to form VEBAs for their workers at the
Big Three automobile manufacturers, thus relieving the companies from funding health plans.
For More Information
Refer to IRS web site at http://www.irs.gov for general information about VEBA trusts or refer to VEBA-specific IRS publications. [http://www.irs.gov/pub/irs-tege/eotopicf84.pdf] .
Wikimedia Foundation. 2010.
Look at other dictionaries:
Voluntary Employees' Beneficiary Association - VEBA — A type of mutual organization that provides life, illness, accident, medical and similar benefits to members, their dependents or their beneficiaries. The association can be established by employees or by an employer and must consist of employees … Investment dictionary
Voluntary Employees Beneficiary Association Plan - VEBA — A tax free post retirement medical expense account used by retirees and their eligible dependents to pay for any eligible medical expenses. The plan is funded by the amount of unused sick leave that an employee has at the time of retirement,… … Investment dictionary
Michigan Education Association — The Michigan Education Association (MEA), headquartered in East Lansing, Michigan, is a labor union representing more than 157,000 teachers, faculty and education support staff throughout the state. Usually referred to as a “teachers union”… … Wikipedia
501(c) — is a provision of the United States Internal Revenue Code (usc|26|501(c)), listing 28 types of non profit organizations exempt from some federal income taxes. Sections 503 through 505 list the requirements for attaining such exemptions. Many… … Wikipedia
Automotive industry in the United States — The American automobile industry began in the 1890s and rapidly evolved into the largest automotive producer in the world through the use of mass production. The United States was the world s leader amongst motor vehicles main manufacturers many… … Wikipedia
History of Chrysler — 1936 Chrysler Airflow Series C 9 This article is about the History of Chrysler, an American automobile manufacturer. Contents 1 History … Wikipedia
Business Overview — ▪ 2009 Introduction Automobiles. The American automotive industry began 2008 in precarious condition, and as the year unfolded, the situation went from bad to worse. First, gasoline prices of $3.50 to $4 per gallon throughout much of the… … Universalium
Michigan — This article is about the U.S. state of Michigan. For other uses, see Michigan (disambiguation). State of Michigan … Wikipedia
Economy of metropolitan Detroit — The Renaissance Center is the world headquarters of General Motors. The economy of metropolitan Detroit, Michigan, is a key pillar of the economy of the United States. Its ten county area has a population of over 5.3 million, a workforce of 2.6… … Wikipedia
Ford Motor Company — Ford redirects here. For other uses, see Ford (disambiguation). Ford Motor Company … Wikipedia