BenefitsLink Message Boards > Voluntary STD Plan welfare plan?

R. Butler

Jul 28 2009, 09:23 AM

I don't really do a whole a lot with H&W plans, but have been asked to look at one briefly.

Company offers short term diability insurance to employees. Completely voluntary; paid with after-tax dollars via payroll deduction. Is this a welfare plan subject to ERISA? Trying to determine whether 5500's should have been filed. Well over 100 participants.

Thanks in advance for any guidance.

J Simmons

Jul 28 2009, 12:46 PM

QUOTE (R. Butler @ Jul 28 2009, 08:23 AM)

I don't really do a whole a lot with H&W plans, but have been asked to look at one briefly.

Company offers short term diability insurance to employees. Completely voluntary; paid with after-tax dollars via payroll deduction. Is this a welfare plan subject to ERISA? Trying to determine whether 5500's should have been filed. Well over 100 participants.

Thanks in advance for any guidance.

I think you have an ERISA plan because the STD program cannot be considered just a payroll practice of continued wages as the EE [corrected] is not bearing all of the cost.

vebaguru

Jul 28 2009, 02:11 PM

Why would this be paid with after-tax amounts rather than through a salary reduction under a 125 premium reduction plan?

R. Butler

Jul 29 2009, 09:15 AM

QUOTE (J Simmons @ Jul 28 2009, 01:46 PM)

I think you have an ERISA plan because the STD program cannot be considered just a payroll practice of continued wages as the ER is not bearing all of the cost.

That is my understanding also, but I have read in a few places that plans where participation is voluntary, no contribution is made by the employer, & the employer does not actively sponsor, are not subject to ERISA reporting & disclosure requirements. I m having trouble reconciling for the employer.

Thanks

J Simmons

Jul 29 2009, 09:30 AM

QUOTE (R. Butler @ Jul 29 2009, 08:15 AM)

QUOTE (J Simmons @ Jul 28 2009, 01:46 PM)

I think you have an ERISA plan because the STD program cannot be considered just a payroll practice of continued wages as the ER is not bearing all of the cost.

That is my understanding also, but I have read in a few places that plans where participation is voluntary, no contribution is made by the employer, & the employer does not actively sponsor, are not subject to ERISA reporting & disclosure requirements. I m having trouble reconciling for the employer.

Thanks

I misunderstood or misread your original post. You might qualify for the 29 CFR § 2510.3-1(j) exception. There is a bit more to it, but you might qualify.