Employer insurance assistance exceeds group-plan exclusion

P/OPINION 75-06


                                                                3(1)


                        November 3, 1975


Dear              :

This is a belated acknowledgment of your letter of June 23,
1975, concerning the exemption for certain group plans under
the Employee Retirement Income Security Act of 1974. We
welcome comments from interested parties for consideration
in formulating regulations for the implementation of the Act.

Section 2510.3-1(1) of the final regulations issued in the
Federal Register of August 15, 1975, outlines the exemption
for “Certain group and group-type insurance programs”. It
embodies substantive changes from the section of the proposed
regulations to which you referred, but we were unable to make
the change in the basic requirement of employer neutrality
which you suggested. The absence of employer involvement
remains the key to the rationale for not treating this type
of program as an employee benefit.

The employer functions involved in the proposed plan you
described, assistance in preparation of claim forms and
receipt of the contract in the employer’s name, exceed
the limited employer involvement contemplated by the
exemption. The same is true for the existing program
you described, since the employer chose the coverage and
the insurance company, and helps employees file claims.

Sincerely,