Exemption from Scedule H for self-funded plans

[Guest Mfcavo]

The exemption for Schedule H for welfare plans applies if the plan meets the requirements of 29 cfr 2520-104-44. That reg says that the exemption applies to "unfunded" and "certain insured" plans. The "certain insured" plans means those which forward employee contributions (if any)within three months. There is no mention of how to handle an unfunded (i.e., self-funded) plan that has employee contributions. If there are employee contributions for a self-funded plan is the plan considered "unfunded" for the purposes of the exemption? The reg says that benefits must e paid "solely from the general assets of the employer". Are employee contributions that are withheld from pay considered to be general assets of the employer?

[Guest Emiliano]

It is my understanding (and I could be mistaken) that employee contributions are not considered to be the general assets of the employer and that they must be held in a trust separate from the employer's general assets or used to pay premiums to an insurance company.

[Guest Mfcavo]

I agree. Since I posted the message, I discovered the caution on page 41 of the 5500 instructions which says that plans that receive employee contributions are not "unfunded".