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Same benefit, er sponsored for some, voluntary for others


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Dental benefit is provided for management, under 100 persons.

It is offered as a fully voluntary benefit for staff.

So total covered persons are over 100.

I'm trying to figure out if this makes it an ERISA covered benefit, among other things requiring a Form 5500 be filed.

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5500 filing requirement is dependent upon the number of “participants” in the plan, so based on what you have outlined it appears to be yes.

Voluntary plans are a non-Erisa plan if there is no sponsorship by employer.  But, assuming their dental plan is a voluntary plan, with employer contribution for some/all participants, the employer contribution causes the plan to become Erisa.

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Does the employer have distinct documents for the management and staff plans?

 

An employer/administrator might want its lawyer’s advice about whether the documents and other facts and circumstances result in only one plan, or more than one plan.

 

In the American Bar Association’s 2009 Q&A session, I presented a question with hypothetical facts and a proposed answer designed to make obvious that an employer had arranged two employee-benefit plans with no purpose beyond avoiding a reporting requirement.

 

Despite a legal reason for ignoring the ostensible separateness of the plans, the Labor department staff answered that the plans could be separate plans.

 

t would be reasonable for a fiduciary to look to the instruments governing the [plans] to determine whether the benefits are being provided under separate plans and to treat the [plans] for annual reporting purposes as separate plans to the extent the instruments establish them as separate plans and they are operated consistent with the terms of such instruments.”

 

https://www.americanbar.org/content/dam/aba/migrated/2011_build/employee_benefits/dol_2009.pdf

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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I agree with Peter that you should discuss with benefits counsel.  It sounds to me that there is too much employer involvement to make the benefit a voluntary plan not subject to ERISA's requirements.  Instead, it is likely that the plan is fully subject to ERISA and it's just that certain participants have to pay 100% of the cost of coverage and others don't. 

But more analysis is needed to determine for sure one way or another. 

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