Are voluntary benefits ERISA-covered?

According to the U.S. Department of Labor, a voluntary welfare benefit program, where the employee pays the entire premium, would not be an ERISA-covered plan if the employer has minimal involvement in plan operations and does not "endorse" the plan. Basically, this means the employer cannot urge or encourage employee participation in the program, or engage in activities that would lead an employee reasonably to conclude that the program is part of a benefit arrangement established or maintained by the employer. Such activities include, but are not limited to:

  • Stating that the plan is part of the employer’s benefit package (e.g., "the ABC Company Life Insurance Plan");
  • Generally being involved with selecting the insurer or coverage amounts; or
  • Stating in communications that the employer is "enthusiastic" about the program.

However, the following employer activities are not considered an "endorsement" of the plan:

  • Permitting the insurer to publicize the program to employees;
  • Collecting premiums through payroll deductions and remitting them to the insurer.

The information above should be used for general reference purposes only. The determination of whether a particular program may be excluded from ERISA is very complex, and requires an analysis of whether the employer’s specific activities exceed the limitations set forth in the relevant regulations, case law, and U.S. Department of Labor Advisory Opinions.

Please Note: Wrap360 and its employees and officers are not permitted to offer legal advice. These FAQs are provided for general information purposes only. As the answers to specific questions may vary based on federal or state law, as well as on company documents for the issues in question, it would be prudent to consult knowledgeable benefits counsel for individualized guidance.