Group Health Program Co National

“The Program obtained its latest tax exemption letter on October 24, 1975, in which the Internal Revenue Service (IRS) stated that the Program, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (IRC). While the Program has been amended since receiving the exemption letter, the Program administrator and the Program's ERISA counsel believe that the Program continues to be designed and operated in compliance with the applicable requirements of the IRC. As a Voluntary Employees' Beneficiary Association (VEBA), qualified under IRC Section 501(c)(9), the Program is required to operate in conformity with the IRC to maintain its tax- exempt status. The Program administrator is not aware of any course of action or series of events that have occurred that might adversely affect the VEBA tax-exempt status. The Program is exempt from federal income taxes under section 501(c)(9) of the IRC except for unrelated business income. The Program has for-profit member organizations that participate in the Program which causes the Program to be subject to unrelated business income tax and deferred taxes due to the overfunded status. The amount subject to taxation is based on excess investment income. For the year ended December 31, 2024, the Program has total current unrelated business income tax expense of $5,264,923 and deferred unrelated business income tax benefit of $220,637. For the year ended December 31, 2023, the Program had total current unrelated business income tax expense of $2,222,929 and deferred unrelated business income tax expense of $2,885,145. At December 31, 2024 and 2023, a deferred tax liability of $3,992,257 and $4,212,894, respectively, has been recorded on the cumulative unrealized gain on investments in the VEBA Trust. Unrelated business income tax expense for the year ended December 31, 2023, includes $849,946 associated with amounts due for the tax year ending December 31, 2020 (including estimated interest and penalties). The remaining $1,372,983 relates to unrelated business income tax expense generated for the year ended December 31, 2023, net of true-up to the December 31, 2022 actual return. Accounting principles generally accepted in the United States of America require Program management to evaluate tax positions taken by the Program and recognize a tax liability (or asset) if the Program has taken an uncertain position that more than likely would not be sustained upon examination by the IRS. The Program is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.”

“Change in deferred tax liability - 220637”