§87D-2 - Establishment of the trust.
[§87D-2] Establishment of the trust. An employee organization shall be exempt from chapter 87A and meet the following requirements in order to establish a voluntary employees' beneficiary association trust under this chapter:
(1) The employee organization shall establish a tax-exempt trust pursuant to Title 26 United States Code section 501(c)(9), as amended, and related regulations, known as a voluntary employees' beneficiary association trust;
(2) The trust may offer health benefits in accordance with Title 26 United States Code section 501(c)(9), as amended, and related regulations;
(3) The trust shall meet all the standards and requirements applicable to employee welfare benefit plans under Title 29 United States Code sections 1001-1191, as amended, and related regulations. The assets of any plan provided by or through the trust shall not inure to the benefit of any employee organization and shall be held for the exclusive purposes of providing benefits to participants and beneficiaries and defraying reasonable expenses of administration; provided that this shall not preclude the trust from returning contributions or payments made by an employer under a mistake of fact within one year after the payment of the contributions or payments;
(4) Each plan offered by the trust shall be established and maintained pursuant to a written instrument that:
(A) Provides a procedure for establishing and carrying out a funding policy and method consistent with the objectives of the plan and the requirements of this chapter;
(B) Describes any procedure under the plan for the allocation of responsibilities for the operation and administration of the plan;
(C) Provides a procedure for amending the plan;
(D) Specifies the basis on which payments are made to and from the plan; and
(E) Provides a procedure for providing adequate notice in writing to any participant or beneficiary whose claim for benefits has been denied, setting forth the specific reasons for such denial, and affording a reasonable opportunity for any participant whose claim has been denied for a full and fair review. The written instrument shall meet any other standards and requirements of Title 29 United States Code [sections] 1001-1191, as amended, and related regulations;
(5) The trust shall provide a summary plan description, material modifications or amendments to the summary plan description, and updates to the summary plan description that meet the standards and requirements of this chapter;
(6) All of the assets of the trust's plans shall be held in trust by the governing board of the trust, at least one member of which shall be a retiree and a member of the employee organization sponsoring the trust;
(7) The governing board of the trust shall hold regularly scheduled meetings open to all participants and beneficiaries and shall provide such persons with advance notice of all meetings; and
(8) The employee organization shall have an applicable collective bargaining agreement with the employer; provided that the agreement shall specify that the employee organization agrees to comply with all requirements of this chapter without regard to whether or not the trust is deemed a governmental plan under federal law. [L 2005, c 245, pt of §2]
Revision Note
Subsection designation deleted pursuant to §23G-15(1).