ERISA/Benefits - Health and Welfare Plans
An “employee welfare benefit plan” covered under the Employee Retirement Income Security Act of 1974 (ERISA) is often referred to as a “health and welfare plan.”
An employee welfare benefit plan is:
- any plan, fund, or program,
- established by an employer, employee organization (such as a union) or both,
- to provide welfare benefits to participant or beneficiaries.
Welfare benefits include:
- medical, surgical, or hospital care or benefits
- benefits in the event of sickness or accident
- disability benefits (both short-term and long-term)
- death benefits
- unemployment or severance benefits
- vacation benefits
- apprenticeship or other training programs
- day care centers
- scholarship funds
- prepaid legal services
- any benefit described under Section 302(c) of the Labor Management Relations Act of 1947 (other than pensions on retirement or death, or insurance to provide such pensions)
Governmental plans and church plans are exempt from ERISA, and thus, are not considered employee welfare benefit plans under ERISA even if they provide for certain of the welfare benefits enumerated above.
The benefits under a health and welfare plan may be provided by insurance, funded directly by the plan sponsor from general assets, or a combination of both (for example, many health plans are self-funded from the employer’s assets, but maintain “stop-loss” insurance for catastrophic events or illnesses). Health and welfare plan benefits also may be funded by a trust.
A “wrap plan” is a welfare benefit plan that “wraps” multiple health and welfare benefit arrangements together in a single plan for purposes of ERISA’s reporting and disclosure rules (i.e., so that the employer can file a single IRS Form 5500 for all of the welfare benefits).
Employers that sponsor health plans covering Medicare-eligible participants have certain obligations with respect to Medicare Part D. Please reference this summary of Medicare Part D for additional information.
Group health plans have certain continuation coverage obligations to participants who lose coverage due to certain specified events. Please reference this summary of COBRA (Federal vs. Ohio) for additional information.
For a discussion regarding recent changes to Medicare Part D rules and requirements of employers, see "New Notice Deadlines, Model Notices for Medicare Part D".
For a discussion of required amendments to cafeteria plans by June 30, 2011, see "June 30th Deadline for Amendments to Cafeteria Plans".
For a discussion regarding the IRS’ postponement of nondiscrimination rules for fully-insured group health plans, see "IRS Delays Effective Date of Nondiscrimination Rules for Insured Group Health Plans".
For a discussion regarding 2010 year-end compliance issues for employee benefit plans, see "2010 Year-End Compliance Checklist for Employee Benefit Plans".
For a discussion regarding the IRS’ postponement of Form W-2 reporting of the value of employer-provided health care benefits, see "IRS Form W-2 Reporting for Employer-Provided Health Care Delayed".
For a discussion regarding 2011 year-end compliance issues for employee benefit plans, see "2011 Year-End Compliance Checklist for Employee Benefit Plans."
