Thanks for the suggestion Mike,
We do use a non two-factor user for powershell as Microsoft, to the best of my knowledge, doesn't allow multi-factor auth with power shell sessions. Since it appears veeam leverages powershell to connect to 365 I'm going to have to use that same user for the backups. I don't like it but I can live with it and rely on a strict password. I'm beginning to realize this isn't a veeam issue but instead of Microsoft one. It does seem backwards to me that the powershell admin user (one who has access to everything) isn't allowed multi-factor authentication. I also don't like giving up such passwords to 3rd party applications.