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IRS Private Letter Ruling Allows a VEBA to Reimburse Medical Benefits for Domestic Partners

April 25, 2014
Private letter ruling (?Ç£PLR?Ç¥) 201415011 held that the tax-exempt status of a voluntary employees?ÇÖ beneficiary association (?Ç£VEBA?Ç¥) trust would not be jeopardized by the VEBA?ÇÖs reimbursement of medical benefits incurred by a participant?ÇÖs domestic partner. This is true regardless of whether the domestic partner qualifies as a dependent under the Internal Revenue Code. However, the IRS?ÇÖ ruling with respect to non-dependent domestic partners turned in part on the VEBA?ÇÖs representation that the total amount of medical benefits that would be paid to non-dependent domestic partners would constitute 3 percent or less of the total amount of benefits paid to all participants and beneficiaries, and thus be a de minimis amount. A PLR is non-binding except on the parties to the PLR and may not be relied on as precedent.?á A copy of the PLR is available here.
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