A VEBA plan is a welfare benefit plan with tax exemption under Internal Revenue Code (IRC) 501(c)(9). It provides for the payment of life, sick, accident, or other benefits to members and dependents of an association.
The net earnings of the plan can’t inure to any private shareholder or individual. Payments to individuals for welfare benefits wouldn’t be considered inurement to a private shareholder or individual.
The membership of this association includes individuals who are entitled to participate because of their employment relationship with the plan sponsor or employer.