Cash in Lieu of Benefits

[Guest laborlawyer]

A CBA provides for a Taft-Hartley health fund and monthly deductions by the employer to fund the plan. The CBA also has a provision that allows for an employee to opt out and receive some cash from the employer if the employee can demonstrate that he/she is covered by another plan. The Plan itself does not mention the opt-out rights. Is there a cause of action under ERISA against an employer who has stopped paying the opt out cash? I see this is an issue in Cafeterial plans, but what about Taft-Hartley health plans?

thanks.

[jmor99]

It seems to me that if the employer signed the CBA, then violated the terms of the agreement, then you have a case. The CBA is a part of how the plan operates. I'd say it's an ERISA case.

[QDROphile]

Does it matter that cafeteria plans are not subject to ERISA? Are you suggesting that the CBA provides supplemetal terms to the health plan, and it is a matter of eligibility and participation terms that are violated? Seems like you still have to connect a few dots before you get to the money part..

[Jacmo]

Two things: An FSA IS subject to ERISA

Secondly, the 125 plan itself may not be subject to ERISA (except as mentioned above) but the underlying or internal health components are.

[Guest Gompers]

I would think you would be looking at just and ordinary LMRA 301 claim. If this is just an ordinary self-funded Taft Hartley welfare plan with no cafeteria plan "overlay" you would not be seeking benefits from a "plan" but rather cash from the employer in lieu of the benefits.

Where I would be worried here is whether everyone who is actually receiving health benefits (as opposed to the cash) has a taxable event because of the choice of receiving cash or a non-taxable benefit. Generally, in order to receive the benefit on a non-taxable basis such an election must be made therough a cafeteria plan.