TOPIC:
What Constitutes Endorsement of a Voluntary Benefit Plan
Question:
If the sponsor of a voluntary benefit plan offering endorses the benefit, does the benefit become an ERISA qualifying benefit plan or program?
Answer:
Yes, if an employer endorses a voluntary benefit plan or program, the benefit will convert to an ERISA-qualifying benefit offering, triggering performance requirements under ERISA.
Endorsement is the most common cause of ERISA status determinations for voluntary benefit plans and programs. Endorsement may arise in any of the following situations (without limitation):
- Adding employer-specific logos or branding to brochures or flyers;
- Listing the benefit among the employer’s core ERISA benefits in guides and other participant disclosures;
- Requiring employees to attend orientation and/or enrollment events;
- Charging employees any type of employer-imposed fees for the enrollment and/or participation in such benefit plans or programs;
- Bundling voluntary benefits with other ERISA benefits offered by the employer for purposes of enrollment eligibility;
- Offering voluntary benefits as COBRA eligible benefits upon termination;
- Mailing reimbursements or claim payments directly to plan participants; and others.
Action:
Employers should evaluate their benefit plan and program offerings to identify voluntary benefits, assuring that each plan or program is administered in a way such as to avoid the occurrence (or appearance) of prohibited employer endorsement.
Details:
For more information, contact the Baldwin Regulatory Compliance Collaborative.
For more information
We’re ready when you are. Get in touch and a friendly, knowledgeable Baldwin advisor is prepared to discuss your business or individual needs, ask a few questions to get the full picture, and make a plan to follow up.
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