What makes you think the employer did not set this up for the employees?  Just because it told you so?  Why would they lie?  The fact is that the employer paid wages to the VEBA instead of to the employees.  IRS has audit guidelines on what to look for, including evasion of employment taxes:

"You determine whether IRC Section 501(c)(9) organizations are meeting their
responsibilities for income tax withholding, FICA and FUTA and reporting on Forms W-2 and W-3 for wages, and IRC Section 6041reporting requirements for other taxable benefits.
If a benefit is taxable, it’ll either be:
 Wages subject to income tax withholding, FICA and FUTA, and reported on
Forms W-2 and W-3 (see IRC Section 3401 and regulations)
 Subject to IRC Section 6041 information return requirements. Generally,
payments by an IRC Section 501(c)(9) organization in excess of $600
constituting taxable benefits (other than wages) must be reported on Forms 1096 and 1099. See Treas. Reg. 1.6041-1(a)(2).

https://www.irs.gov/pub/irs-tege/atg_vebas.pdf