Health and Welfare Plan

Health and Welfare Plan

A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise Health and welfare benefit plans include plans that provide

  1. medical, dental, visual, psychiatric, or long-term health care; severance benefits; life insurance; accidental death or dismemberment benefits;
  2. unemployment, disability, vacations or holiday benefits;
  3. apprenticeships, tuition assistance, day-care, housing subsidies, or legal services benefits; and
  4. postemployment benefits such as salary continuation, supplemental unemployment benefits, disability-related job training and counseling.


Plan participants may be active or terminated employees (including retirees), as well as covered dependents and beneficiaries, of a single employer or group of employers. Employer contributions may be voluntary or required under the terms of a collective bargaining agreement negotiated with one or more labor organizations. Plans may require contributions from employers and participants (contributory plans) or from employers only (noncontributory plans).

A health and welfare plan may process benefit payments directly or it may retain a third-party administrator. In either case, a plan that is fully or partially self-funded is obligated for the related benefits.

During periods of unemployment, a noncontributory plan may require contributions by participants to maintain their eligibility for benefits.

Benefits may be provided through insurance contracts paid for by the plan (an insured plan), from net assets accumulated in a trust established by the plan (a self-funded plan), or both.