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Sick Pay under ERISA


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Short term disability or sick pay are generally treated as mere payroll practices not subject to ERISA. But if an employer wants ERISA coverage to avoid state mandated benefits, it can set up a trust and Plan Documents. Does anyone have experience with this ? How much hassle to handle the reporting requirements? Must checks be cut seperate from payroll or could the plan reimburse or prefund the employer's payroll check ?

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Tom.jenkins:

What state mandates are your referring to? The only states I know of that mandate short term disability are Cal., New York, New Jersey, Ghode Island and Hawai. These plans are exempt from ERISA. It is my understanding that you cannot avoid the state madated benfits in these states. You can however, provide higher levels of benfits in these state. I guss I don't understand your question.

I also agree that salary continuation plans that pay benefits solely from employer assets are exempt from ERISA. If the STD plans, in nopn-madte states were insured or partially insured it is my understnading that they could subject to ERISA.

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