ERISA Coverage of Qualified Benefits

[IRA]

True or False:

Any qualified benefit offered through a cafeteria plan is automatically an ERISA plan because in order for contributions to the plan (in which the qualified benefits are offered) to be excluded from income under IRC Section 106, the plan must be "employer-provided." Thus, even if an employer tries to fall within the ERISA safe harbor (e.g., payroll deductions only and no endorsement, etc.), the very fact that the plan is offered through a cafeteria plan means the plan is "employer provided" and thus an ERISA plan.

If true, why? If false, why?

[J Simmons]

Probably False, but here's a recommended reading list:

US Dept of Labor (DOL) Opinion Letter 2001-05A (June 1, 2001)

DOL Opinion Letter 96-12A (July 17, 1996)

DOL Opinion Letter 94-22A (April 20, 1994)

Footnote 5 to DOL Opinion Letter 94-15A (April 20, 1994)

DOL Opinion Letter 94-23A (July 1, 1994)

DOL Opinion Letter 94-26A (July 11, 1994)

DOL Opinion Letter 90-08A (April 11, 1990)

DOL Opinion Letter 77-54A (August 8, 1977).

Johnson v Watts Regulator, 63 F3d 1129 (1st Cir 1995)

O’Brien v Mutual of Omaha Ins Co, Case # 99-CV-02151-HAM, ED La (12/7/1999)

Roehrs v Minnesota Life Ins Co, No. CV-03-1373-PHX-LOA (D.Ariz. 02/16/2006)

Bagden v Equitable Life Assur Society of the US, 1999 US Dist LEXIS 7066 (ED Pa 1999)

Peterson v American Life & Health Insurance Co, 48 F3d 404 (9th Cir 1995)

Stern v Provident Life & Accident Ins Co, 295 FSupp2d 1321 (MD Fla 2003)

Laventure v Prudential Insurance Co of America, 237 F3d 1042 (9th Cir 2001)

Belanger v Wyman-Gordon Co, 71 F3d 451 (1st Cir 1995)

Stoudemire v Provident Life and Accident Insurance Co, 24 FSupp2d 1252 (MD Ala 1998)

Levett v American Heritage Life Ins Co, 971 FSupp 1399 (MD Ala 1996)

Lott v Metropolitan Ins Co, 849 FSupp 1451 (MD Ala 1993)

Hrabe v Paul Revere Life Ins Co, 951 FSupp 997 (MD Ala 1996)

Casselman v AFLAC, 143 Fed.Appx. 507 (4th Cir. Nos. 04-2370 & 04-2378, 06/24/2005)

Butero v Royal Maccabees Life Ins Co, 174 F3d 1207, 1213 (11th Cir 1999)