Federal & State Regulations | Employee benefits - Rhode Island

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. In Rhode Island, employer contribution is optional for group life insurance.

In November 2009, new rules for group life insurance policies were enacted (per SB 463 and HB 5826). The employees eligible for insurance must be all of the employees, or all of any class or classes thereof. The policy may provide that the term “employees” may include retired employees, former employees and directors of a corporate employer.

The premium for the policy must be paid either from the employer’s funds or from funds contributed by the insured employees, or from both. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must cover all eligible employees, except those who reject the coverage in writing. However, an insurer may exclude any debtors as to whom evidence of individual insurability is not satisfactory to the insurer.

The policy must also contain certain provisions, including, but not limited to conditions for insurability, benefits payable, certificates, and termination of the policy.

In cases of a Collective Bargaining Agreement, life insurance policies must provide that in the event of a cessation of work by the employees covered by the policy as the result of a labor dispute or involuntary layoff, the policy, upon timely payment of the premium, shall continue in effect with respect to all employees insured by the policy on the date of the cessation of work who continue to pay their individual contribution and who assume and pay the contribution from the employer.

Rhode Island also has laws governing group legal services insurance. “Group legal services insurance" is a form of voluntary legal services insurance covering not less than ten employees, with or without their eligible dependents, written under a master policy issued to any employer or association of employers, including the trustee or trustees of a fund established by an employer, or to a labor union or other similar employee organization, including the trustees of a fund established by a labor union or employee organization.