A Voluntary Employees’ Beneficiary Association (VEBA) is a tax-exempt employee trust for private sector employees that can be used by retirees and their eligible dependents to pay for qualified medical expenses.
- Employers contribute tax-free funds on behalf of benefits eligible employees
- Employees may make after-tax contributions, if option to do so is elected by employer
- Investment earnings are tax-free
- Disbursement of funds for qualified medical expenses is tax-free
- Assets in the trust can be forfeited by the employer, and must remain in the plan