Health and Welfare Fund Question

[Brian Haynes]

Can a multiemployer health and welfare fund (a 501©(9) VEBA) provide third party administration services to a different health and welfare fund? It seems to me that providing such services is outside the scope of the "benefits" that can be provided under 501©(9) and possibly even under the Taft-Hartley Act. If they can be provided, I assume the receipt of any fees for such servivces would constitute UBTI. Thanks for any input.

[GBurns]

I do not recall ever seeing a VEBA that performs TPA services. I am assuming that you mean claims administration etc. I thought that it was usuallly outsourced.

[Don Levit]

I believe these services would be beyond those that a VEBA would provide, unless it is for its own participants.

This looks more like services a for-profit commercial insurer would perform, which should take the income out of the exempt category.

Don Levit