What is a VEBA account?

2 answers | Last updated: Nov 09, 2016
A fellow caregiver asked...

I am interested in learning more about a VEBA account. I have heard my friends talk a lot about these recently and went online to see if I could get more information. Unfortunately, this is very limited information around VEBA.


Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

VEBA is an acronym for Voluntary Employee Beneficiary Asssociation. A VEBA account is a tax-free medical expense account for retired people and their eligible dependents. It is funded by unused sick leave that an employee may have accumulated at the time of retirement. The benefit of a VEBA is that unused sick leave at retirement is able to be utilized through a VEBA for future medical expenses in a manner that is tax-free.


Community Answers

Health care 4 1 answered...

I am 33 (not retired) and have a VEBA account through my employer. It pays for what my insurance does not pay for...ex. co-pays, deductible, glasses, dental, etc. They fund up to $5,000/year. If you are riembursed through a VEBA account you can not deduct your medical expenses on your taxes. If you employer does not offer this benefit and you have an HSA health plan you can open an HSA bank account and contribute $3,100/year or $6,250/year as a family. HSA are also used for medical expenses and can be funded through your employer or as an individual. HSA carry over year to year unlike an FSA where you use it or lose it. Hope this helps.