Employee Benefit Plans What Are They?
When an employer benefit provides many choices and options, employers will establish a benefit plan to document and help coordinate the general rules and provisions around the complex benefit choices and options. The benefit plan (often called a plan document) provides a structure of rules, processes, and procedures to make it feasible for the employer to provide complex, optional, and variable benefits to a large population of employees.
The U.S. government also has an interest in seeing that U.S. employers provide health care and retirement benefits to American workers to minimize the need for Americans to rely on government support in these same areas.
The U.S. government provides guidelines for employee benefit plans, with the intention of protecting the health care and retirement benefits of U.S. workers. When U.S. employers follow these rules, the government provides the employer with a tax break. These guidelines also provide clear rules and regulation about employee benefits in the areas of health care and retirement.
By creating a benefit plan, an employer can also document that they are following these government required guidelines.