Discount vision plans COBRA eligible, Section 125 eligible and/or requ

[Guest Phil Cohen]

After speaking with a COBRA "firm", several providers and a Section 125 administrator we are not getting clear answers. First, the assumption here is that the vision program is purely a discount and is absolutely not insurance.

1) Does a discount vision plan fall under COBRA?

2) If the employee pays part of the cost, is it eligible for inclusion in a premium only plan (Section 125)?

3) Is a 5500 filing required?

Your feedback with any supporting information would be appreciated.

Thanks!

[KIP KRAUS]

If employees are only given a discount by a certain vender, and the employer does not have to sign any kind of agreement with the provider, I wouldn't consider that as an ERISA plan.

In addition, if there is no requirement other than the requirement that an employee be an employee of the company recieving the discount, I wouldn't consider it an ERISA plan. No enrollment requirement, no plan.

[Greg Judd]

I too lean toward the view that the program described isn't an ERISA plan, but would point out

a) a welfare plan may be an ERISA plan regardless the funding mechanism--the presence or absence of insurance has nothing to do with it;

b) I'm not sure that a program whose only eligibility requirement is employment would for that reason alone NOT be an ERISA plan.

For what it's worth, Here's the CFR section pertaining to the definition of employee welfare benefit plan

[Guest Phil Cohen]

To clairfy, these plans provide discounts at multiple providers throughout the country (not just one vendor or chain) and do require an employer application.

I read the DOL CFR Section supplied by Greg (thanks!) and under section J, what is NOT an ERISA plan it seems that we meet 3 of the 4 requirements. We fail the first point that no employer or employee contributions are made. In this case, the employee is paying the "premium".

Does this mean it is an ERISA plan????

For the record, I am simply trying to understand this issue and am not, nor intend to become an expert or give advice.

Thanks.

[This message has been edited by Phil Cohen (edited 05-25-2000).]

[KIP KRAUS]

Phil:

I guess I'm confused about how this plan is set up. Is the employer paying something for this benefit? If so, it sounds like more than a discount plan.

You say employees are paying a premium???

Sounds more like a vision plan that could be subject to ERISA.