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Non-affiliated union employees


Guest jmc51

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Guest jmc51

Does anyone have an opinion on whether a Trust composed of several non-affiliated union employees will be considered a VEBA? All participants are covered by a collectively bargaining agreement.

If the trust is currently a VEBA, what steps should the Trust take to confirm that such a change has not effected its VEBA status.

Does anyone have an opinion on whether such a Trust would be considered a MEWA where all participants are covered by a collective bargaining agreement (even though unaffiliated unions)?

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I would be concerned with "non-affiliated" union employees participating in the same trust. The requirement isn't that all employees be members of some union, but that their participation be governed by a collective bargaining agreement that was the subject of good faith bargaining between the employer and employee representatives.

I have seen so-called "union" plans that permit (for example) physicians to join the needletrades union and participate in a VEBA. This does NOT work.

To confirm that such a change has not effected its VEBA status, a new application for a letter of determination should be filed with IRS disclosing all appropriate (including potential adverse) information. Upon receiving a new determination letter, the plan's tax-exempt status will be safe.

Such a Trust would definitely be a MEWA. Your question is, is it exempted from MEWA filings (both federal and state) if all the employees are union affiliated. The answer for federal law purposes is: a Trust would be subject to the MEWA requirements if participation is voluntary rather than the subject of good faith negotiations between the employer and employee representatives. (Contact the MEWA department of EBSA's national office to check this.)

Regulation of such an arrangement under state law would vary from state to state depending upon the wording of state statutes. I know of at least one state where the arrangement would be exempt from state insurance department regulation (but subject to regulation by state DOL) and one state which would still subject such an arrangement to regulation by state insurance department.

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