Comments on: When Does an Employer Have an ERISA Plan? http://aikenandaiken.com/blog/benefits-lawyers/42 An Employment And Benefits Law Blog From The Law Firm Of Fri, 08 Aug 2008 00:44:11 +0000 http://wordpress.org/?v=2.5 By: Don Levit http://aikenandaiken.com/blog/benefits-lawyers/42#comment-22 Don Levit Thu, 01 May 2008 14:34:16 +0000 http://aikenandaiken.com/blog/?p=42#comment-22 Diane: What state are you located in? I don't think this would be an ERISA plan according to federal law. If you're located in Texas, however, the departrment of insurance may think otherwise. I have several documents I can send you to support your position. Don Levit Diane:
What state are you located in?
I don’t think this would be an ERISA plan according to federal law.
If you’re located in Texas, however, the departrment of insurance may think otherwise.
I have several documents I can send you to support your position.
Don Levit

]]> By: Diane Weiner http://aikenandaiken.com/blog/benefits-lawyers/42#comment-21 Diane Weiner Wed, 30 Apr 2008 17:01:20 +0000 http://aikenandaiken.com/blog/?p=42#comment-21 We have a large bank client who offers an individual universal life program through our agency. It is payroll deducted. The client is very adament that the benefit not be communicated on their enrollment system or included in their new hire or annual enrollment benefit descriptions -- due to fear of the plan falling under ERISA. The only communication we can do is very other year with either a paper mailing to all employees to their home and/or email alerts. During the periodic communication campaign, the client will assist with 4 email alert "pushouts". They are resistent to onsite meetings of any kind. If the client included the benefit on their online enrollment system and in their paper materials, would this bring the plan under ERISA? They also offer Legal, Home/Auto, and Long Term Care under these same guidelines - infrequent "hands off" communication. There are: no employer contributions, participation by employees is voluntary, and the employer does not receive any compensation for its services other reasonable compensation for administrative services. The key is: the employer’s role in the plan is limited to collecting premiums through payroll deductions and remitting them to an insurer. If the employer allowed a brochure with contact info to be included in the online enrollment system and iin the paper package, would this invoke ERISA? If they allowed us to send a package to new hires throughout the year, would this invoke ERISA? Do you have something I can use to reassure the client? THanks, Diane -- If you need to publish this, I need my name removed. We have a large bank client who offers an individual universal life program through our agency. It is payroll deducted. The client is very adament that the benefit not be communicated on their enrollment system or included in their new hire or annual enrollment benefit descriptions — due to fear of the plan falling under ERISA. The only communication we can do is very other year with either a paper mailing to all employees to their home and/or email alerts.

During the periodic communication campaign, the client will assist with 4 email alert “pushouts”. They are resistent to onsite meetings of any kind.

If the client included the benefit on their online enrollment system and in their paper materials, would this bring the plan under ERISA? They also offer Legal, Home/Auto, and Long Term Care under these same guidelines - infrequent “hands off” communication.

There are: no employer contributions, participation by employees is voluntary, and the employer does not receive any compensation for its services other reasonable compensation for administrative services. The key is: the employer’s role in the plan is limited to collecting premiums through payroll deductions and remitting them to an insurer. If the employer allowed a brochure with contact info to be included in the online enrollment system and iin the paper package, would this invoke ERISA? If they allowed us to send a package to new hires throughout the year, would this invoke ERISA? Do you have something I can use to reassure the client?

THanks, Diane

– If you need to publish this, I need my name removed.

]]> By: Don Levit http://aikenandaiken.com/blog/benefits-lawyers/42#comment-20 Don Levit Mon, 28 Apr 2008 17:31:10 +0000 http://aikenandaiken.com/blog/?p=42#comment-20 Michele: Thanks for your reply. I agree with you that the employer needs to understand whether or not it has established an ERISA plan, and the advantages and disadvantages of doing so or not. My complaint concerns the Texas Department of Insurance, in asserting its authority in whether or not Texas enployers have established an ERISA plan. In my opinion, the establishing of an ERISA plan is a federal definition, and therefore it should be based on federal laws. In The Commissioner's bulletin issued Aug. 1, 2006, it states, "A cafetetia or Section 125 plan is an employee welfare benefit plan." If an employer allows pre-tax deductions through a cafeteria plan, the arrangement is an employee welfare benefit plan. Thus this arrangement "creates a small or large employer health benefit plan subject to the provusions of TIC Chapter 1501." Don Levit Michele:
Thanks for your reply.
I agree with you that the employer needs to understand whether or not it has established an ERISA plan, and the advantages and disadvantages of doing so or not.
My complaint concerns the Texas Department of Insurance, in asserting its authority in whether or not Texas enployers have established an ERISA plan.
In my opinion, the establishing of an ERISA plan is a federal definition, and therefore it should be based on federal laws.
In The Commissioner’s bulletin issued Aug. 1, 2006, it states, “A cafetetia or Section 125 plan is an employee welfare benefit plan.”
If an employer allows pre-tax deductions through a cafeteria plan, the arrangement is an employee welfare benefit plan. Thus this arrangement “creates a small or large employer health benefit plan subject to the provusions of TIC Chapter 1501.”
Don Levit

]]> By: Michele Aiken http://aikenandaiken.com/blog/benefits-lawyers/42#comment-18 Michele Aiken Sat, 26 Apr 2008 15:37:54 +0000 http://aikenandaiken.com/blog/?p=42#comment-18 Don: Thanks for your comment. I just responded to you directly via email, but I thought I'd respond here as well, for anyone else who would be interested. It is possible to structure a non-ERISA VEBA benefit plan but it would depend on numerous issues surrounding the specific provisions of the proposed program, taking into account things such as the facts and circumstances surrounding the implementation and the administration of the plan to see if it would fall outside the requirements for an ERISA welfare plan. Also, as with any benefit program, the employer should explore the goals they are trying to achieve by having a non-ERISA plan. There are some advantages provided by ERISA-governed plans and an employer should consider all of the factors to ensure their program is structured to reach their goals and provide the greatest advantage/protection for the employer. Michele Don:

Thanks for your comment. I just responded to you directly via email, but I thought I’d respond here as well, for anyone else who would be interested.

It is possible to structure a non-ERISA VEBA benefit plan but it would depend on numerous issues surrounding the specific provisions of the proposed program, taking into account things such as the facts and circumstances surrounding the implementation and the administration of the plan to see if it would fall outside the requirements for an ERISA welfare plan. Also, as with any benefit program, the employer should explore the goals they are trying to achieve by having a non-ERISA plan. There are some advantages provided by ERISA-governed plans and an employer should consider all of the factors to ensure their program is structured to reach their goals and provide the greatest advantage/protection for the employer.

Michele

]]> By: Don Levit http://aikenandaiken.com/blog/benefits-lawyers/42#comment-17 Don Levit Fri, 25 Apr 2008 16:46:14 +0000 http://aikenandaiken.com/blog/?p=42#comment-17 Michele: Thanks for providing this interesting article. I am curious if there is a way to provide a plan through a VEBA, without the employer setting up an ERISA plan. Let's assume that, of course, participation is voluntary, and employees pay all contributions through a section 125 plan. We know that VEBAs must have a separate and independent existence from the employer. Thanks for any insight you can provide. Don Levit,CLU,ChFC Michele:
Thanks for providing this interesting article.
I am curious if there is a way to provide a plan through a VEBA, without the employer setting up an ERISA plan.
Let’s assume that, of course, participation is voluntary, and employees pay all contributions through a section 125 plan.
We know that VEBAs must have a separate and independent existence from the employer.
Thanks for any insight you can provide.
Don Levit,CLU,ChFC

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