[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2520.104-20]

[Page 416-417]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2520_RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE--Table 
of Contents
 
    Subpart D_Provisions Applicable to Both Reporting and Disclosure 
                              Requirements
 
Sec. 2520.104-20  Limited exemption for certain small welfare plans.

    (a) Scope. Under the authority of section 104(a)(3) of the Act, the 
administrator of any employee welfare benefit plan which covers fewer 
than 100 participants at the beginning of the plan year and which meets 
the requirements of paragraph (b) of this section is exempted from 
certain reporting and disclosure provisions of the Act. Specifically, 
the administrator of such plan is not required to file with the 
Secretary an annual or terminal report. In addition, the administrator 
of a plan exempted under this section--
    (1) Is not required to furnish participants covered under the plan 
and beneficiaries receiving benefits under the plan with statements of 
the plan's assets and liabilities and receipts and disbursements and a 
summary of the annual report required by section 104(b)(3) of the Act;
    (2) Is not required to furnish upon written request of any 
participant or beneficiary a copy of the annual report and any terminal 
report, as required by section 104(b)(4) of the Act;
    (3) Is not required to make copies of the annual report available 
for examination by any participant or beneficiary in the principal 
office of the administrator and such other places as may be necessary, 
as required by section 104(b)(2) of the Act.
    (b) Application. This exemption applies only to welfare benefit 
plans--
    (1) Which have fewer than 100 participants at the beginning of the 
plan year;
    (2)(i) For which benefits are paid as needed solely from the general 
assets of the employer or employee organization maintaining the plan, or
    (ii) The benefits of which are provided exclusively through 
insurance contracts or policies issued by an insurance company or 
similar organization which is qualified to do business in any State or 
through a qualified health maintenance organization as defined in 
section 1310(d) of the Public Health Service Act, as amended, 42 U.S.C. 
300e-9(d), the premiums for which are paid directly by the employer or 
employee organization from its general assets or partly from its general 
assets and partly from contributions by its employees or members, 
Provided, That contributions by participants are forwarded by the 
employer or employee organization within three months of receipt, or
    (iii) Both; and
    (3) For which, in the case of an insured plan--
    (i) Refunds, to which contributing participants are entitled, are 
returned to them within three months of receipt by the employer or 
employee organization, and
    (ii) Contributing participants are informed upon entry into the plan 
of the provisions of the plan concerning the allocation of refunds.

[[Page 417]]

    (c) Limitations. This exemption does not exempt the administrator of 
an employee benefit plan from any other requirement of title I of the 
Act, including the provisions which require that plan administrators 
furnish copies of the summary plan description to participants and 
beneficiaries (section 104(b)(1)) and furnish certain documents to the 
Secretary of Labor upon request (section 104(a)(6)), and which authorize 
the Secretary of Labor to collect information and data from employee 
benefit plans for research and analysis (section 513).
    (d) Examples. (1) A welfare plan has 75 participants at the 
beginning of the plan year and 105 participants at the end of the plan 
year. Plan benefits are fully insured and premiums are paid directly to 
the insurance company by the employer pursuant to an insurance contract 
purchased with premium payments derived half from the general assets of 
the employer and half from employee contributions (which the employer 
forwards within three months of receipt). Refunds to the plan are paid 
to participating employees within three months of receipt as provided in 
the plan and as described to each participant upon entering the plan. 
The plan appoints the employer as its plan administrator. The employer, 
as plan administrator, provides summary plan descriptions to 
participants and beneficiaries. He also makes copies of certain plan 
documents available at the plan's principal office and such other places 
as necessary to give participants reasonable access to them. The 
exemption provided by Sec. 2520.104-20 applies even though the plan has 
more than 100 participants by the end of the plan year, because it had 
fewer than 100 participants at the beginning of the plan year and 
otherwise satisfied the conditions of the exemption.
    (2) A welfare plan is established and maintained in the same way as 
the plan described in example (1), except that a trade association which 
sponsors the plan is the holder of the insurance contract. Since the 
plan still sends the premium payments directly to the insurance company, 
the exemption applies, as in example (1).

[43 FR 10148, Mar. 10, 1978, as amended at 46 FR 5884, Jan. 21, 1981; 67 
FR 776, Jan. 7, 2002]