Long Term Disability

[Christine Roberts]

PLR 199930015 recently held that LTD coverage provided by a VEBA and obtained either through purchase of new coverage or by modification of existing plans is attributable to employee contributions for purposes of Code Section 104(a)(3), even when the employer acts a conduit for the purchase of coverage or the payment of premiums, such that benefits received under such plans are excluded from employees' gross income. Specifically, employer either purchased coverage and reimbursed itself through after tax payroll deductions, or paid for premiums and include premiums in employees gross income, with additional payment to employees to compensate for cost of coverage & additional income tax burden. Am wondering if the result was directly related to use of a VEBA or if it would also apply to the same practice (employer as conduit), without a VEBA. I have also posted on VEBA board.

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