Should Short-Term and Long-Term Disability Benefits Be Included in the Wraps?

According to the U.S. Department of Labor, a short-term or long-term disability plan is deemed to be a non-ERISA payroll practice if the benefits are paid to current employees out of the employer's current assets. If the benefit is funded through a trust or insurance, it is ERISA-covered and should be included in the Wrap documents.

Determining which non-ERISA benefits to include in the Wrap is ultimately at the employer's discretion. For example, some employers choose to include non-ERISA benefits in the Wrap templates for administrative convenience, to communicate all benefits to which a participant may be entitled in a single document. Even if a particular benefit is not ERISA-covered, it would be prudent to inform employees about the benefit in some manner.

The information above should be used for general reference purposes only. The determination of whether a particular program may be excluded from ERISA is very complex, and therefore it would be prudent to consult with qualified legal counsel or a benefits specialist, as Wrap360 cannot offer legal advice.