Voluntary Employees Beneficiary Association (VEBA)
Definition of "Voluntary employees beneficiary association (VEBA)"
Tax-exempt entity as qualified under Section 501 (c)(9) of the Internal Revenue Code. The VEBA usually provides its members and their dependents and beneficiaries with paid life insurance, health insurance, and accident insurance. The VEBA can be established by any employer for employees even if they already have a retirement plan. Employers are permitted to make tax-deductible contributions to the VEBA that is usually established as a trust with the bank acting as a trustee. Earnings build within the trust on a tax-deferred basis. If the VEBA should terminate, all of the VEBA's assets are distributed to the active participants in the VEBA as of the date of termination. Distributions to a VEBA participant are not required to begin by age 70M, nor is a penalty charged if the distributions begin prior to age 5914. Survivor benefits are received on an income and estate tax-free basis. Assets of the VEBA are exempt from creditors' claims. The IRS code requires that the VEBA must have at least two participants (one of the participants can be a spouse); benefits must be based on annual compensation as well as age; and all full-time employees who are at least age 21 and have at least three years of full-time service must be allowed to participate. The employer can terminate the plan at any time.
Popular Insurance Terms
Combination of several coverages to protect the insured. For example, the comprehensive health insurance policy combines the basic hospital plan with major medical insurance to cover ...
Same as term Coverage: protection under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and ...
Coverage that is excluded under commercial general liability insurance (comprehensive general liability insurance) for the loss of use of undamaged tangible real or personal property as the ...
Insurance coverage sold by a broker as contrasted with insurance coverage sold by an agent. ...
Liability and physical damage coverage for trailers under business or personal auto policies. Most automobile insurance policies offer liability coverage for common types of trailers owned ...
Two basic kinds of policies sold by health insurance companies: medigap insurance (medicare supplementary insurance); and medicare wraparound ...
Premium charged (and applied on a uniform basis) for property insurance covering properties at multiple locations. This rate is used under a blanket insurance policy instead of using a ...
Legislation passed in 1988 by the U.S. Congress to facilitate movement of checks through the collection system. As the result of this Act, the Federal Reserve has established rules for the ...
State plans that provide health insurance coverage for those who are unable to purchase medical insurance. Coverage is provided by a specially formed nonprofit-making pool comprised of all ...
Have a question or comment?
We're here to help.