Disability - ERISA plan?

[oriecat]

In December we started a voluntary disability program for employees, through Baltimore Life. I am not real familiar with ERISA at this point (I am working on it!) but what I read in a mini ERISA book I have is that this would only be non-ERISA if we did not in any way sponsor or endorse the product. I think we very much are endorsing it, it's not like we are just letting a salesperson come in and sell it, we send out the enrollment info, I have sent claim forms to people, etc. Am I correct in my thinking? We do not have a plan document, so I asked if we would be receiving one, and they replied that since it is a voluntary product, that ERISA doesn't apply.

[Steve72]

Take a look at ERISA Reg 2510.3-1(j). That's what the vendor is hanging its hat on.

The "endorsement" question in 2510.3-1(j) is a very fine one, and one which the entities that sell these products tend not to be very well informed of (my high school English teacher would kill me for that last sentence).

Courts have reached different conclusions on what level of employer involvement constitutes "endorsement". If you are solely perfoming ministerial tasks, you are probably OK, but some courts have found that something as simple as distributing information on the plan on employer letterhead is sufficient to merit ERISA coverage.

It is impossible for the vendor to correctly make a blanket statement that "ERISA does not apply". In order to avoid ERISA, the employer must distance itself almost entirely from the benefit.

[KJohnson]

You might want to look at this thread:

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

And these DOL advisory opinions:

http://www.dol.gov/ebsa/programs/ori/advis...ry94/94-24a.htm

http://www.dol.gov/ebsa/programs/ori/advis...ry94/94-23a.htm

http://www.dol.gov/ebsa/programs/ori/advis...ry94/94-22a.htm

[oriecat]

Thanks!

[oriecat]

Another question - would the fact that the certificates show "Participating Entity" with our company name in any way influence the endorsement aspect?

[GBurns]

If there are certificates issued it means that this is a group product, To whom is the Master Group policy issued?

Re these certificates: Does it define ""Participating Entity"? Does the employee's name appear anywhere? Where?

[oriecat]

The certificate says inside:

Policy, Certificate, and Covered Insured Information

Coverage is provided under Group Policy Number: 3000

Issued to Group Policyholder: Firstar Bank, NA as Trustee of the Baltimore Life Insurance Company Trust

Participating Entity: Our Company

Covered Insured: EE Name

Certificate Number:

Certificate Effective Date:

Participating Entity is defined in the booklet as "means an entity that participates in the Trust identified on the Policy, Certificate and Covered Insured Information".

[GBurns]

I would say that this is way beyond endorsement, this definitely is employer participation, selection and about everything else.

Why is this not a MEWA under your state law? If not a MEWA have you checked the M1 at the DOL ?

I doubt that this could ever be non ERISA. I also question the ability to participate in the Trust just because the application and certificate say so.