Employer Contribution VEBA Trust for National University

The Employer Contribution VEBA Trust for National University is a tax-exempt entity established under Section 501(c)(9) of the Internal Revenue Code. A Voluntary Employees' Beneficiary Association (VEBA), it is designed to manage and provide health and welfare benefits for employees of National University and possibly other affiliated institutions.

Purpose and Function

VEBAs like this trust are generally established to administer health reimbursement arrangements (HRAs) or other welfare benefits for employees. These trusts are funded solely by employer contributions, with employees unable to contribute to the plan. The primary goal is to offer additional health coverage options that complement existing insurance plans rather than replace them.

Structure

VEBAs are irrevocable trusts that must file annual tax returns with the IRS (Form 990) to maintain their tax-exempt status. They require approval from the IRS through a Form 1024 application. The trust's assets are managed independently, ensuring tax-free earnings on investments, which are often overseen by specialized investment consultants.

Use in Benefit Planning

Employer Contribution VEBAs are popular for managing post-employment medical expenses or as part of retiree health savings accounts. They can be structured to meet the specific needs of an employer's workforce, providing a flexible tool for managing health-related benefits while minimizing costs.

Regulatory Framework

VEBAs must adhere to strict regulatory requirements, ensuring compliance with tax laws and maintaining a separate identity from other employer-sponsored plans. The operation of a VEBA trust involves annual audits by independent accounting firms, though these do not verify the accuracy of employer contributions, which remain the responsibility of the employer and employee.

Similar Entities

While the Employer Contribution VEBA Trust for National University is specifically focused on National University, similar trusts exist across various sectors, including public education and state government agencies. These entities serve as models for managing employee health benefits efficiently and tax-effectively.

[1] https://www.benefits.nu.edu/retirement-savings [2] https://projects.propublica.org/nonprofits/organizations/453637176 [3] https://portal.veba.org/Employer/HRA/Resources/Resource?file=18007735 [4] https://toolbox.bpas.com/wp-content/uploads/BPASVEBAProposal2024_Updated_Toolbox.pdf [5] https://repository.upenn.edu/bitstreams/861e6cb7-76cd-422d-ba6b-a8189881d241/download