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Christine Roberts

Use of VEBA in connection with class-action ERISA settlement?

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Presume a large group of retirees have won a class-action settlement arising from a broken promise to provide lifetime health benefits. Individual award amounts will range from $1K to $100K. Is there any way to use a VEBA or other arrangement such that settlement funds will be put towards medical coverage or care in a manner that is nontaxable to the plaintiffs?

I am exploring VEBAs, 401(h) arrangements, 105(h) arrangements, HRAs, "retiree medical accounts (a Watson Wyatt product, I believe), and uninsured plans under 104(a)(3). Any and all comments and suggestions are appreciated.

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Guest b2kates

Christine,

yes generally for a VEBA, a number of years ago, when I was with KPMG I wrote the PLR request to establish a VEBA for post retirement medicals for a bankrupt company and the ensuing litigation.

IRS determined VEBA was proper and not subject to 419A limitation.

the Fund was then established with about 5million and covered approx 1,000 retirees.

If you want to discuss send me a note.

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