ERISA Plan Assets

[Guest jeffbolmeyer]

Are employee pre-tax payroll deductions to pay the employee's share of group medical insurance premiums in either a fully-insured plan or self-insured plan considered "plan assets?" If "yes," and the employer is the named fudiciary, is the employer (named fudiciary) subject to ERISA's Prohibited Transaction rules? Is a COBRA premium payment made by the Qualified Beneficiary also considered to be a "plan asset."

[Guest Sieve]

The answer is that they are plan assets. But, at the same time, the DOL long ago suspended the requirement that welfare plan payments by employees be held in trust by the employer under certain circumstances, and I believe that suspension still applies. See http://74.125.93.132/search?q=cache:mQIZQr...=clnk&gl=us.

So I don't think the employer can be subject to the PT rules to the extent they involve use of the money (because, if not held in trust, the assets remain employer general assets).

What PT do you have in mind?

[QDROphile]

Be very careful about the limitations on the relief. If a fund is actually created or described to participants, the exemption does not apply. Most cafeteria plan FSA arrangements fail to qualifiy for the exemption, but no one seems to care. Amounts that immediately pass through to cover insurance premiums are relatively safe. Any self-insured benefit arrangements need attention.