Yes technically—but most employers use a wrap document to bundle all benefits into one ERISA plan. It simplifies compliance, documents, and 5500 filings.
Employer Responsibilities
Does ERISA apply to voluntary benefits?
If the employer contributes or promotes the benefit, ERISA likely applies. But if employees pay 100% and the employer stays hands-off, the benefit may be ERISA-exempt.
What are the penalties for not complying with ERISA?
Missing ERISA documents like SPDs or 5500s can lead to penalties of up to $110 per day—or more. Non-compliance may also trigger a DOL audit.
What is a Wrap document and do I need one?
A wrap document bundles your benefit plans into a single ERISA-compliant plan. It satisfies documentation requirements and is highly recommended for any employer offering group health or welfare benefits.
Are small employers exempt from ERISA requirements?
No. ERISA applies to private employers of any size offering group health or welfare plans—even those with just one employee. There’s no small-business exemption under the law.
What are an employer’s responsibilities under ERISA?
Employers must provide plan documents, distribute SPDs, act in participants’ best interests, follow plan rules, and provide required notices. Large plans may also need to file Form 5500 annually.
What documents are required under ERISA?
Employers must have a formal plan document and provide a Summary Plan Description (SPD) to participants. Larger plans may also need to file Form 5500 with the government.
Which employers are subject to ERISA?
ERISA applies to most private-sector employers that offer health or welfare plans. Government and church employers are generally exempt, but there’s no small-business exemption under ERISA.
What is ERISA and how does it apply to health plans?
ERISA is a federal law that governs most private employer health plans. It sets rules for plan documents, disclosures, and fiduciary duties to protect employees’ benefits.
What alternatives are there to COBRA coverage?
You may find cheaper options through the Marketplace, a spouse’s plan, or Medicaid. These alternatives can offer strong coverage—especially if you qualify for financial assistance.
Can someone elect COBRA for just one family member?
Yes. Each covered family member can choose COBRA independently, allowing one person to keep coverage while others decline—giving families flexibility based on needs and cost.
What benefits do I get under COBRA?
COBRA coverage matches the group plan exactly—same doctors, benefits, and rules. It’s a continuation of coverage, not a limited or separate version of the plan.
Can COBRA coverage be dropped early?
Yes. COBRA can end before the full coverage period if the beneficiary misses a payment, gets other group coverage, becomes eligible for Medicare, or if the employer ends the plan.
What happens if a COBRA payment is late?
COBRA includes a 30-day grace period for late payments. If payment isn’t received by the deadline, coverage can be terminated and doesn’t have to be reinstated.
Who is responsible for sending COBRA notices?
Employers must report qualifying events, and plan administrators must send timely COBRA notices. If the employer handles both roles, they have 44 days to notify affected employees and dependents.
How much does COBRA coverage cost?
COBRA costs the full premium—employee plus employer share—plus a 2% fee. It feels expensive because you’re no longer getting help from your employer to pay for coverage.
How long does COBRA coverage last?
COBRA usually lasts 18 months for job loss or reduced hours, and 36 months for divorce, death, or a dependent aging out. Some situations allow for extensions.
What events trigger COBRA eligibility?
COBRA is triggered by events like job loss, reduced hours, divorce, death of the employee, or a child aging out—if they result in loss of group health coverage.
What is COBRA coverage and who qualifies for it?
COBRA allows eligible employees and dependents to continue their group health coverage after losing it due to job loss, reduced hours, or other qualifying events—if the employer is subject to COBRA.
What’s the definition of a seasonal employee under the ACA?
A seasonal employee works full-time hours for a limited time each year. Employers may exclude them when determining ALE status if they work 120 days or fewer annually.
What is a full-time equivalent (FTE) employee?
An FTE combines part-time employee hours into “full-time equivalents” to determine if an employer is subject to the ACA mandate. 120 part-time hours equals one FTE for this purpose.
What’s the definition of a full-time employee under the ACA?
For ACA purposes, a full-time employee is anyone working at least 30 hours per week or 130 hours per month on average. This threshold triggers employer mandate obligations.
What is an Applicable Large Employer?
An Applicable Large Employer (ALE) is a business with 50 or more full-time and full-time equivalent employees. ALEs must offer health coverage or face possible ACA penalties.
What are the penalties under the ACA’s Employer Mandate in 2025?
Employers may owe $2,900 per full-time employee (4980H(a)) or $4,350 per subsidized employee (4980H(b)) if they fail to offer affordable, minimum value coverage.
What is the Federal Poverty Line safe harbor and how does it work?
The FPL safe harbor sets a fixed monthly max—$113.20 in 2025—for self-only coverage to be considered affordable, making ACA compliance simple and consistent across all employees.