Minneapolis Public Schools withheld nearly $3 million owed to an employee health care trust account beginning in 2024, according to a heavily redacted report prepared by the law firm Greene Espel late last year and obtained by the Reformer as part of a public records request.
The school district’s financial maneuver, which has not previously been reported, risked creating a shortfall in the health care account, known as voluntary employee benefits association, or VEBA, under the IRS tax code.
The withheld funds included both employees’ and employer’s contributions to health insurance premiums. Because the district self-insures, money from that account is used to pay health care claims, which is why the fund is supposed to be walled off to prevent raiding for other uses. It’s unclear whether the withholding violated any laws or collective bargaining agreements with district unions…