When Is Your ERISA Plan or Flexible Benefit Plan Not Good Enough to Be a Bona Fide Plan?

Winstead PC
Contact

Employee benefit plan drafters frequently complete plan documents for their client’s use assuming that the document’s status as an employee benefit plan under the Employee Retirement Income Security Act of 1974 (‘‘ERISA’’) or under the Internal Revenue Code of 1986, as amended (the ‘‘Code’’), is definitive. The Ninth Circuit decision in Flores v. City of San Gabriel, (824 F. 3d 890 (9th Cir. 2016), cert. den’d 137 S. Ct. 2117 (2017)), which the U.S. Supreme Court permitted to stand, calls into question that assumption. A plan may not be a plan for all purposes. Failure to consider the company as a whole, as an employer and the implications of other federal laws may raise risks for the company. The Ninth Circuit reviewed whether payments made to employees as opt-out payments for electing not to take health insurance under a flexible benefit plan (Code section 12 plan, a/k/a a cafeteria plan) were excludable from the employee’s compensation and therefore not included a part of their regular rate of pay for purposes of calculating overtime pay under the Fair Labor Standards Act of 1938 (the "FLSA").

Originally published in Bloomberg Law Pension & Benefits Daily - November 28, 2017.

Please see full Article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Winstead PC | Attorney Advertising

Written by:

Winstead PC
Contact
more
less

Winstead PC on:

Reporters on Deadline

Related Case Law

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.