(1) Employer contributions into an account, the accumulation of interest or other earnings in an account, and payments from an account for qualified health care expenses are tax-exempt, as provided in 15-30-111 , MCA, and under applicable federal laws and regulations to the extent that the plan is qualified under applicable sections of the Internal Revenue Code.

(2) Each employer shall make deposits to the VEBA health benefit plan on behalf of its eligible members pursuant to the terms of collective bargaining agreements or employer policies. Employer deposits shall be specifically allocated to each participating member's account.

(3) Each participating employer shall provide for a member to annually designate how many hours (if any) of the member's sick leave balance in excess of 240 hours will be automatically converted to an employer contribution to the member's account each pay period, as provided in 2-18-1311 , et seq., MCA.

(4) Each participating employer may establish a maximum amount of sick leave hours that may be automatically converted to a contribution. An employer may establish the maximum annual hours at "0" until an employee terminates employment.

(5) Other contributions shall be allowed as outlined in statute, but may not be discriminatory in favoring highly compensated employees. The VEBA group must all participate in any form of approved contributions.