Unfunded self-insured fringe benefit plans (other than such benefits as vacations and holidays, which are normally unfunded) which contractors make "out of pocket" payments as expenses arise rather than irrevocable contributions to a trust or other funded arrangement, are not normally considered "bona fide" plans for SCA purposes. A contractor, however, can request approval by the administrator of an unfunded self-insurance plan in order to allow credit for payments under the plan to meet fringe benefit requirements of the act. In considering whether such a plan is bona fide, the administrator will consider factors such as whether the benefit can be reasonably anticipated, whether there is a legally enforceable commitment to provide the benefit, whether the plan has been carried out under a financially responsible program and whether employees received notice in writing. At the administrator’s discretion, they may direct assets to be set aside and preserved in an escrow account or that other protection be afforded to meet future obligations.

Even if an unfunded self-insurance plan qualifies as "bona fide", this does not mean the fringe benefit requirements are met. Only payments actually made by the employer can be counted, not the value of the plan. While all payments made for employees under the plan can be counted against the $2.56 average hourly requirement, only payments made for an individual employee can be counted against the $1.39 per hour H&W requirement.

{TAG_FORM_TITLE}