Welfare Plan - Contract Year vs Plan year issues

[Guest ANNEBV]

Client started 125 plan and insurance benefits 2/1/99. 125 plan is a calendar year plan. Insurance benefits have a contract year = 2/1/YY - 1/31/YY. They had approximately 30 covered employees at the beginning of 1999. They have 160 covered lives at the beginning of 2000.

Looking to confirm that they are still considered a "small welfare plan" for 2000 because at the beginning of the contract year that ends in the 2000 calendar year (i.e., 2/1/99), they had less than 100 covered employees.

Perhaps more succintly, is the "beginning of the year" determinant the beginning of the plan year or the beginning of the contract year?

HELP!!

[KIP KRAUS]

The Plan Year is the determinant. Insurance contracts do not establish an ERISA Plan. An ERISA PLan document does.