Small insured welfare arrangement and partial exemption

P/-OPINION 76-06



                                                      3(1)



                     April 30, 1976


Dear        :
This is in response to your recent letter concerning the
Employee Retirement Income Security Act of 1974 (ERISA).
We regret that we were unable to reply to your inquiry
earlier.
You state that, in addition to a profit sharing plan,
your organization also maintains an insured arrangement
providing life and accident as well as health benefits.
The company contributes the entire cost of benefits
for employees, and the employees contribute the cost
of dependent's coverage through payroll deductions.
During a telephone conversation with          of my
staff on March 12, 1976, you disclosed that the plan
covers less than one hundred participants. You ask
whether or not such insured arrangement is subject to
the provisions of Title I of the ERISA, and, if it is,
what are your obligations under the Act.
Such a plan is an "employee welfare benefit plan "
as that term is described in section 3(1) of the ERISA
and is subject to the reporting and disclosure and
fiduciary responsibility requirements of Title I of the
Act.
However, section 2520.104-20 of the enclosed regulation
that was published in the Federal Register on August 15,
1975, grants a limited exemption to certain employee
welfare benefit plans which cover fewer that one hundred
participants at all times during a plan year. Included
among such plans to which the exemption applies are plans
in which the benefits are provided exclusively through
insurance contracts or policies issued by an insurance company
or similar organization which is qualified to do business
in any State, the premiums for which are paid directly by
the employer maintaining the plan from its general assets
or partly from its general assets and partly from contributions
by its employees, provided that contributions by participants
are forwarded by the employer within three months of receipt.
P/-OPINION 76-06


This section of the regulation would be applicable to the
welfare benefit arrangement described in your letter, and
exempts the plan from certain reporting and disclosure
requirements. Please refer to the section 2520.104 -20
to determine the conditions of the partial exemption
and the remaining responsibilities of the administrator
of such a plan with respect to the reporting and disclosure
requirements.

Sincerely,