§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;

(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).