Employer endorsement of a non-ERISA welfare plan.

[DTH]

I have an employer that sponsor a voluntary welfare program that allows employees to purchase a disability income benefit with post-tax dollars. The employer picked and limited the benefit to be purchase from one vender. If the employer meets all the safe harbor rules, would the plan be subject to ERISA to too much employer involvement (i.e., would be considered endorsement under ERISA 2510.3-1(j)(3)? I assume .. Yes, but you know what assuming does.

Would the same hold true if the employer elected a few vendors for the employees to choose from?

[KIP KRAUS]

Sounds like the employer is allowing employees to purchase a non-group individual LTD policy via payroll deduction. If this is not a group product I believe that ERISA doesn’t apply. If the employer is merely allowing employees to purchase individual LTD policies via payroll deduction I wouldn’t consider that sponsoring the plan.

[KJohnson]

You may want to look at this link which discusses the regulatory exception and DOL opinion letters on that exception.

http://www.benefitslink.com/boards/index.php?showtopic=1490