The New Retiree Health VEBAs
NYU Review of Employee Benefits and Executive Compensation, Chapter 7, 2008
22 Pages Posted: 26 Feb 2009
Date Written: February 19, 2009
This article examines the recent trend of transferring employer retiree health care liabilities to VEBAs. After providing a brief history of retiree health benefits and an overview of the basic tax rules governing VEBAs, the article explains the difference between traditional VEBAs and the new retiree health VEBAs. The article then discusses the advantages and limitations of the new VEBAs. The article concludes that the new VEBAs may be an appropriate vehicle for pre-funding retiree health benefits for some employers, particularly financially distressed employers with significant retiree health liabilities and large union forces, but they are not a panacea for the country's health care financing woes.
Keywords: retiree health, retiree health financing
JEL Classification: I10, J32, K32
Suggested Citation: Suggested Citation