This employer has been advised by their benefits broker to install a voluntary benefits program. Employees will be offered the chance to purchase various types of cancer insurance and dread disease policies. The broker will be responsible for all marketing, advertising and enrollment of employees. This broker receives commissions from the insurers underwriting the voluntary benefits [as is traditionally done]. The broker has offered to share a substantial portion of these commissions with the employer. The question you have to answer or consider is as follows: If this employer sets up this voluntary plan under the terms described above, have they created an ERISA plan? Explain carefully

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Business

Rishi Gamble

27 January, 01:55

This employer has been advised by their benefits broker to install a voluntary benefits program. Employees will be offered the chance to purchase various types of cancer insurance and dread disease policies. The broker will be responsible for all marketing, advertising and enrollment of employees. This broker receives commissions from the insurers underwriting the voluntary benefits [as is traditionally done]. The broker has offered to share a substantial portion of these commissions with the employer. The question you have to answer or consider is as follows: If this employer sets up this voluntary plan under the terms described above, have they created an ERISA plan? Explain carefully

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Kristian Preston · Answer 1

Yes, they have created an ERISA plan

Explanation:

For proper understanding, is important to know the meaning of ERISA plan

ERISA stands for Employee Retirement Income Security Act. ERISA is a federal law enacted in 1974 that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individual employee in these plans. Since the types of cancer insurance and dread disease policies will be offered through the employer and the employer will be compensated. It's categorized as an ERISA plan and follows ERISA Regulations