Small employer hospital benefit plan under ERISA

P/OPINION 77-19

                                               3(1)


                    January 18, 1977


Dear          :

Thank you for your letter in which you make reference to
the "Federal Welfare and Pension Plan Disclosure Act". We
assume that you have reference to the Employee Retirement
Income Security Act of 1974 (ERISA) that supplanted the
Welfare and Pension Plans Disclosure Act beginning on
September 2, 1974. We regret that we were unable to
respond to your inquiry earlier.

You state that your client, (named) Inc., maintains a
hospital benefit program funded through the (named) Plan.
Four employees are participants in this plan and the
employer makes the contributions to purchase benefits.
You ask whether or not such a program is subject to
title I of the ERISA.

Section 3(1) of the ERISA defines an "employee welfare
benefit plan" as any plan, fund or program that is
established or maintained by an employer or by an employee
organization for the purpose of providing for its
participants or their beneficiaries, through the purchase
of insurance or otherwise, among other things, hospital
care.

As your client's program provides hospital care through
the purchase of insurance or otherwise, it is an
"employee welfare benefit plan" covered by title I of the
ERISA, and it is subject to the requirements of parts 1, 4
and 5 thereof.

However, section 2520.104-20 of the enclosed regulation
that was published in the Federal Register on August 15,
1975, provides a limited exemption from the reporting and

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P/OPINION 77-19

disclosure requirements of title I of the Act for certain
small welfare plans such as that maintained by your
client. Please refer to this regulation section 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 require-
ments.

Sincerely,




Enclosure