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Summary of differences between federal and state regulations
Employee benefits are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).
Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. Massachusetts has laws that apply to group life insurance, and group legal services insurance.
Massachusetts group life insurance provisions include the following (Chapter 175):
- Not less than ten employees at date of issue. (§133)
- “Employees” may include retired employees, and the partners or individual proprietors if an employer is a partnership or an individual proprietor; and the officers, managers, and employees of subsidiary or affiliated corporations and the individual proprietors, partners, and employees of affiliated individuals and firms, if the business and subsidiary or affiliated corporations, firms, or individuals is under common control, through stock ownership, contract, or otherwise. (§134)
- Premiums are to be paid by the policyholder, either wholly from the employer's funds or funds contributed by him, or partly from such funds and partly from funds contributed by the insured employees. (§133)
- The employer may not be the beneficiary. (§133)
- If part of the premium is contributed by employees and the benefits are offered to all eligible employees, at least 75 percent of such employees may be covered, or at least 40 percent if each covered employee has been medically examined and found acceptable for ordinary insurance by an individual policy. (§133)
- If coverage ceases because of termination of employment or eligibility, or termination of the policy, employees remain covered for 31 days as long as they have been covered for at least five years before termination. The coverage is to be for the amount of life insurance which the employees are is entitled to have issued to them under an individual policy. This same coverage extends to spouses of covered employees if employment is terminated, or the employee dies. (§134)
- There is a grace period of 31 days. (§134)
Massachusetts laws for group legal services insurance (Chapter 176h) deal mostly with the insuring entity, but the plan must not be unfair, inequitable, misleading, or deceptive (§5)
State
Contact
Massachusetts Division of Insurance
Regulations
General Laws of Massachusetts
Chapter 175: Section 133 Group life insurance defined: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter175/Section133
Chapter 175: Section 134 Group life policies; commissioner's approval; contents: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter175/Section134
Chapter 176H: Section 5 Group insurance policy or insurance certificate contract; filing copies; approval; hearing: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter176h/Section5
Federal
Contact
Employee Benefits Security Administration (EBSA)
Regulations
29 CFR chapter XXV (Parts 2509 – 2590)