file or no file?

[wsp]

Posted this under the 5500 page and got no response, perhaps this is a better place for it.

I had a client ask me this...

Voluntary Long Term Disability, Life Insurance & Accident plans that employees pay through pay roll deduction. Statement from insurance company identifying the contract and broker commissions paid.

Since this is voluntary and employee paid, what if any reporting obligations do they have?

Is there an understandable source out there that can lead me through the questions that I need to ask the client to determine if they should file? I have so little contact with health plans that I haven't a clue.

Thanks for any help that can be provided.

[jmor99]

Go to www.benefitnews.com/law/archives There you will find a list of articles. Page down (way down--watch for December 2002) until you find the article entitled "voluntary benefit plans may fall under ERISA".

There are pros and cons to subjecting these plans to ERISA. Most employers AREN'T, for several reasons. One is that the sales rep who sold the benefits didn't know or didn't tell. When the employer is made aware, they see it as a problem, "one more thing to do", etc. and ignore the whole thing. Further, I haven't heard of much enforcement one way or the other. ERISA has bigger fish to kill, although a lot could be at stake for large employers.

[GBurns]

The problem might not be with the fact that there is no enforcement.

I recall that most of the reports were of lawsuits against either the employer or the Plan. It would seem that that would be the greater risk to an employer, and I do not recall that the cases were solely against large employers.

If a lawsuit is brought by a participant, I would expect that somewhere sometime contact would be made with the DoL. As a result of the matter being brought to their attention, it might be that they would have no alternative but enforcement action.

So reporting or not reporting might not be the thing to watch out for.