The New Summary of Benefits and Coverage (SBC)

As open enrollment season approaches, employers and their advisors are getting ready to use the new Summary of Benefits and Coverage (SBC) format required under federal rules. The basic rules have been in place for several years, but 2017 is the first year that health plans must use newly updated templates and instructions to create their SBCs.
This article answers frequently-asked questions about the SBC and what you need to do as the employer sponsor.

 

1. What is the Summary of Benefits and Coverage (SBC)?

The Summary of Benefits and Coverage (SBC) describes the plan’s benefits and limits, provides contact information, and illustrates hypothetical coverage scenarios in a standardized format. Using templates and instructions provided by federal agencies, health insurers and employers insert case-specific information to create an SBC for their plan. See a sample SBC.

The SBC is sometimes called the uniform four-page summary, although it may be longer due to double-sided pages. The format requires presenting specific information in a specific order which is intended to help employees easily understand the plan’s key features and compare different plans.

 

2. Who is responsible for the SBC? The insurance company or the employer?

Group health plans are required to provide the SBC to plan participants before enrollment or re-enrollment. For plans provided through group insurance, the insurance carrier is responsible for producing the SBC and providing it to the plan administrator (employer). Both the insurer and employer are responsible for distributing the SBC to the plan participants. Either one may handle the distribution, but the employer needs to ensure it is done.

For self-funded health plans, the plan sponsor (employer) is responsible for producing and distributing the SBC. Most self-funded employers choose to contract with their third-party administrator or claims administrator for this service, but the employer retains ultimate responsibility for compliance.

3. Is an SBC required for every health plan? If the employer offers multiple plans, can the information be consolidated into a single SBC? 

An SBC generally is required for any health plan providing medical benefits, but not for plans that primarily provide excepted benefits. For example, SBCs are not required for the following:

  • Limited-scope stand-alone dental and/or vision plans;
  • Health Flexible Spending Accounts (HFSAs) with little or no employer contribution;
  • Fixed-indemnity or specific-disease policies;
  • Long-term care, disability or accident coverage; or
  • Retiree-only plans.

A separate SBC is required for each health plan that can be chosen for enrollment. For instance, if the employer offers one PPO plan and two HMO plans, there will be three separate SBCs. A consolidated summary describing multiple plans may be helpful to employees, and may be provided in addition to the SBCs, but cannot take the place of the required SBCs.

Different options within a plan can be shown on the same SBC provided the information is clear. For instance, different coverage levels (self/family) or different cost-sharing options (high deductible/low deductible) can be presented in the same SBC as long as the remainder of the coverage information is very similar.

4. Is an SBC required for a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA)?

A Health Savings Account (HSA) is a savings program—not health plan—so no SBC is required. However, a High Deductible Health Plan (HDHP), which sometimes is called an HSA-compatible plan, is a health plan requiring an SBC. Employers that contribute to their employees’ HSAs may want to show that information on the HDHP SBC.

A Health Reimbursement Arrangement (HRA) is a group health plan. In almost all cases, the HRA is integrated with another plan, such as a major medical plan or HDHP. Employers usually choose to include information about HRA amounts, and how they reduce deductibles or other cost-sharing, on the medical plan SBC.

5. What is the deadline for distributing the SBC? 

The insurer or employer must distribute the SBC at each of the following times:

  • At the beginning of each enrollment period (i.e., when a new employee first becomes eligible to enroll and at the start of each annual open enrollment period);
  • Within seven (7) business days of the participant’s request; and
  • Within 90 calendar days of a HIPAA special enrollment.


6. Do all eligible employees receive the SBC? What about dependents?

The SBC must be distributed to all plan participants including employees, retirees, and COBRA beneficiaries. Separate distribution for dependents is not required, unless the employer knows that they have a different address.

New hires (or employees newly eligible to enroll) must be given SBCs for all the plans for which they are eligible. At open enrollment, however, enrolled participants only need to receive the SBC for the plan in which they are currently enrolled, unless they request SBCs for other plans.

Also at open enrollment, it is not necessary to provide SBCs to employees who are eligible but not enrolled. Instead, they can be given a notice, such as a postcard, explaining that SBCs are available and how to request them. The Department of Labor (DOL) provides model language for this purpose that the employer may customize for its use:
Availability of Summary Health Information

“As an employee, the health benefits available to you represent a significant component of your compensation package. They also provide important protection for you and your family in the case of illness or injury. 

“Your plan offers a series of health coverage options. Choosing a health coverage option is an important decision. To help you make an informed choice, your plan makes available a Summary of Benefits and Coverage (SBC), which summarizes important information about any health coverage option in a standard format, to help you compare across options.

“The SBC is available on the web at: http://www.website.com/SBC. A paper copy is also available, free of charge, by calling 1-XXX-XXX-XXXX (a toll-free number).”

7. Can the SBC be distributed electronically or are paper copies required? 

SBCs can be distributed electronically provided the method complies with the DOL safe harbor for electronic delivery of benefit notices. The usual DOL guideline is a little less strict for SBCs. For instance, if enrollment is conducted exclusively online, SBCs can be provided electronically. Otherwise, for enrolled participants who use a computer as part of their regular job duties, the SBC can be sent to that computer, or it can be posted and a notice sent explaining how to access it, along with information about how to request a paper copy at no charge. For eligible participants who are not enrolled, it is sufficient to post the SBCs online as long as persons are notified of availability (see model notice above). In any case, a paper copy must be furnished upon the participant’s request.

More Information 

For copies of the new templates, instructions, and related materials, see the following:

In summary, employers offering group health coverage are encouraged to work with their carriers and benefit advisors to ensure that SBCs are prepared and distributed according to the federal rules.

from ThinkHR
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What are pay-per-use Health Insurance plans?

Level Funding

As health care costs continue to rise, level funding and self-funding are becoming a more and more attractive option for smaller companies. Technically speaking Benefit Administration Group uses level funded health insurance and insurance captives as the funding mechanisms for each pay-per-use health plan. In more simple terms, here is what that means for customers like you:

  1. Each plan has fixed monthly premiums and no change in monthly costs regardless of how many claims are incurred each month.
  2. Instead of your premium rates being determined by community rates set by your employees’ age and zip code, premium rates are determined by proper underwriting and the actual risk (demographics and health history) of your employees. This is accomplished through the use of a simple online health questionnaire and allows many companies to get far lower rates than they would otherwise from regular fully insured products.
  3. At the end of each year, if you incurred fewer claims than expected, your company gets a refund for the unused claims dollars.
  4. You have stop loss insurance fully baked into your plan rates so that if you incur more claims than expected during any given month, or throughout the year, you still never pay more than the fixed monthly premiums.
  5. If at any time you don’t like your plan, or you don’t like your renewal rates you can always leave and go back to your old carrier or a new one.

Human Resources Q & A of the Day

Question:

We’ve hired a new employee and have agreed to reimburse their COBRA premium until they become eligible for our insurance. They provided us with proof (copies of checks and invoices) that they paid a 3rd party administrator for their COBRA coverage. Is this reimbursement taxable to the employee when processing through payroll?

 

Answer:

An employer could choose to offer to pay for COBRA for some period of time but keep in mind that COBRA premium payment arrangements while sometimes convenient, can expose an organization to potential liability so we also recommend discussing any arrangements with legal counsel to ensure compliance. Specifically, any agreement in writing to pay for COBRA should be reviewed in partnership with legal and be explicit in terms of the boundaries of what will be provided and for exactly how long. Paying the COBRA fees directly to the employee is not unusual but it has different tax implications than paying the insurance carrier directly or paying the employee based on substantiated expenses (i.e. receipts).

Below is a link to a copy of IRS Information Letter 2006-0042 (INFO 2006-0042) discussing a particular case. In that case, the employer paid its former employee’s COBRA premiums. The IRS determined that the payments were excludable from gross income (thus exempt from income taxes and employment taxes) provided that the employer either (a) paid the insurer directly, or (b) paid the employee based on documented expenses. If, however, the employee had the discretion to use the funds for any other purposes (i.e. he or she just got a lump sum cash “COBRA” payment from the employer) the amount would be taxable income. Please note that we cannot provide tax advice to clients and recommend seeking guidance from a tax professional where appropriate.

Small Business Insurance Options: Fully Insured Vs. Self-Insured Vs. Level Funding Plans

self-fund-b

For those of you who haven’t heard, level funding is the next big thing in small business insurance options.  But how do you know if it’s right for your company?  And if you decide it’s a good solution, what is your next step?

Fully Insured Vs. Self-Insured Vs. Level Funding Plans

First, let’s start with a basic review of how most companies purchase insurance.  Traditionally there are two ways of doing things:

Fully Insured

A fully insured plan means that you are passing all of the risk onto your insurance carrier who charges you a flat monthly fee based on how they gauge the risk of insuring your employees.

If covered employees experience health issues and use the plan more, you will probably face a hefty increase in the monthly premium your business pays when your plan renews.  Conversely, if your employees rarely use the insurance, you’re stuck playing a flat monthly rate no matter what.  This model decreases the risk of month-to-month fluctuations but doesn’t provide any meaningful incentive for having healthy employees.

Self-Insured

A self-insured plan is one in which the business pays the actual claims and essentially assumes the role of the insurance carrier in terms of managing risk. Many large companies offer at least one plan that is fully self-insured because they have a large pool of covered employees and also have the cash reserves to protect against a spike in claims volume or amount.

Historically, self-insurance has been perceived as far too risky in the small business market for a number of reasons.  Small businesses typically have less cash on hand and can’t weather a dramatic increase in costs as easily.  Also, claims data is very hard to come by in small business so it’s difficult to judge if self-insuring is worth the risk because you don’t even know the risk!  Most small businesses also lack the manpower in-house to actually review and process claims so they still pay an insurance company to act as a Third Party Administrator (TPA).  Though the business is paying the claim, the insurance company will actually process it accordance with the plan documents and ensure that all protocol is followed.

Level Funding

Today, level funding is emerging as a third option somewhere in between fully insured and self-insured.  Proponents of level funding argue that it offers the benefits of both insurance models with none of the risks.  So how does it work?

The “level” in level funding refers to the fact that you self-insure, but pay a level or steady fee each month as determined by your TPA.  Level-funded plans also come fully integrated with individual and aggregate stop-loss insurance.  Individual stop-loss insurance will kick in if a covered employee or dependent exceeds a certain dollar amount in claims.  Aggregate stop-loss will be activated above a certain dollar amount for all claims.  After you pay your level monthly fee for a year, your TPA will compare what you’ve paid with the actual claims and refund you any difference if you’ve paid more than you’ve spent.  In summary, you get the regular and predictable cost of a fully insured plan, but because you’re actually self-insured, you only end up paying for the healthcare costs actually incurred by your employees.

Benefits of Level-Funding for Small Business

Level-funding is becoming popular because plans following this model are not subject to several key regulations of the Affordable Care Act.  For example, they don’t have to offer a package of mandated benefits.  Because plans are self-insured, they can be written to the specifications of the business owner.  Also because level funded plans are technically self-insured, business owners also avoid paying the Health Insurance Tax (HIT) levied as part of the Affordable Care Act.  Furthermore, self-insuring your plan gives you more control and discretion as a business owner to approve claims outside of the contract.  If you have a tenured employee whose medical treatment would be denied under a fully insured plan, a level-funded approach would let you choose if you wanted to cover it anyway as a gesture of goodwill.

Level-funding is surely the wave of the future in the small business market.  If you think it might be a good strategy for your business, contact Benefit Administration Group for more information.  Many large insurance carriers are offering a level-funded option and your broker can help you choose a plan that’s right for you.  The Helios team are considered experts in this innovative new model and can help your business evaluate options and decide if level-funding can save your company money.

SPD, Plan Document, Certificate of Insurance – Do You Have What You Need?

business-documents

A summary plan description (SPD) is the primary vehicle for informing participants and beneficiaries about their plan and how it operates. It must:

  • Be written for the average participant and be sufficiently comprehensive to apprise covered persons of their benefits, rights, and obligations under the plan; and
  • Accurately reflect the plan’s contents as of the date not earlier than 120 days prior to the date the SPD is disclosed.

SPDs are to be distributed automatically to participants within 90 days of becoming covered by the plan and to pension plan beneficiaries within 90 days after first receiving benefits. However, a plan has 120 days after becoming subject to the Employee Retirement Income Security Act (ERISA) to distribute the SPD. An updated SPD must be furnished every five years if changes are made to SPD information or the plan is amended — otherwise the SPD must be furnished every 10 years.

Plan documents are all documents related to plan, including the SPD. The plan administrator must furnish copies of certain documents upon written request and must have copies available for examination. These documents include the latest updated SPD, latest Form 5500, trust agreement, and other instruments under which the plan is established or operated. Copies must be furnished no later than 30 days after a written request. The plan administrator must make copies available at its principal office and certain other locations.

Evidence of coverage (EOC) is further information regarding the plan that details coverage for the plan period. Each insurance carrier will have an EOC booklet, also called a schedule of benefits. These documents are often called certificates of insurance. This EOC/schedule of benefits does not meet the SPD requirements under ERISA. The EOC explains the health benefits participants and their dependents have under the plan. It details the services that will and will not be covered and the actions employees must to take to receive the health benefits — such as paying a co-pay, meeting a deductible, or using particular health care providers. The EOC can also refer to a certificate or contract provided to a health plan member that contains information about coverage and other rights.

ERISA requires the plan sponsor (employer) to provide an SPD to all plan participants. The SPD may incorporate the carrier’s EOC by reference, which generally provides sufficient description of the plan’s benefits. However, the SPD also must include specific content, such as ERISA plan number, Employer Identification Number (EIN), plan financing method, and other information that would not be found in a carrier EOC. Many employers choose to do an SPD wrap, which incorporates all benefits in one document instead of having a separate one for each line of coverage.

According to the Department of Labor’s Final Rules Relating to Use of Electronic Communication and Recordkeeping Technologies by Employee Pension and Welfare Benefit Plans; Final Rule, you can distribute insurance certificates and various ERISA required plan documents electronically via a company website. The department allows electronic notification and distribution of documents by email, attachment to an email, or by posting documents on a company website. However, just placing the documents on a company website does not, by itself, satisfy ERISA’s disclosure requirements.

Under ERISA, the rules allow for electronic delivery of all documents that must be furnished or made available to participant and beneficiaries. This includes SPDs, summary annual reports, individual benefit statements, and investment-related information for participant-directed accounts. These rules are limited to disclosures that plans are required to make to participants and beneficiaries under ERISA.

Prior to implementing, a plan administrator must notify all participants and beneficiaries of the availability of the particular disclosure document by sending written or electronic notice that directs them to the document on the website.

Hey Kids, Get to Work!

kids-workIf you have come to the conclusion that it is time for your children to start contributing to the revenue (rather than expense) side of your family’s income statement, there are a few things you need to know. Below is a good summary of things to consider before hiring your children to work for you:

Louisiana Employment of Minors

Child Labor

Louisiana’s child labor law is located at La. Rev. Stat. Ann. §§ 23:151 – 23:258. The law generally applies to any employer who employs minors. The law does not apply to minors employed in agriculture or domestic services in private homes.

Prohibited Employment

Minors Under 14

As a general rule, minors under 14 may not be employed at any time in Louisiana. However, minors under 14 may be employed if all of the following conditions are met:

  • The minor is at least 12 years old.
  • The minor’s parent or legal guardian is an owner or partner in the business in which the minor is to be employed.
  • The minor will work only under the direct supervision of the parent or legal guardian who owns or is a partner in the business.
  • All of the protections afforded to minors age 14 and 15 are afforded to minors age 12 and 13.
  • The minor obtains an employment certificate.

Minors Under 16

Minors under 16 may not be employed in the following occupations:

  • In connection with a poolroom or billiard room.
  • In connection with power-driven machinery.
  • In a manufacturing, processing, or mechanical establishment or occupation.
  • Close to any lounge or other location where alcoholic beverages are sold, except as otherwise provided by law.
  • In the distribution or delivery of goods or messages for any person engaged in the business of transmitting or delivering goods or messages.
  • Driving any motor vehicle on a public road.

Minors Under 18

Minors under 18 may not be employed in the following occupations:

  • In oiling, cleaning, or wiping machinery or shafting or applying belts to pulleys.
  • In or about any mine or quarry.
  • In or about places where stone cutting or polishing is done.
  • In or about plants that use, transport, or manufacture explosives or articles containing explosive components.
  • In or about iron or steel manufacturing plants, ore reduction works, smelters, foundries, forging shops, hot rolling mills, or in any other place in which the heat treatment of metals is done.
  • In the operation of machinery used in the cold rolling of heavy metals or in the operation of power-driven machinery for punching, shearing, stamping, bending, or planing metals.
  • In or about sawmills or cooperage stock mills.
  • In the operation of power-driven woodworking machines or off-bearing from circular saws.
  • In logging operations.
  • In the operation of a school bus transporting children to or from school.
  • In the operation of passenger or freight elevators or hoisting machines.
  • In spray painting or in occupations involving exposure to lead or its compounds or to dangerous or poisonous dyes and chemicals.
  • In any place in which the sale of alcoholic beverages constitutes its main business, unless the minor has a written contract to perform and is under the supervision of a parent or legal guardian. An establishment with a retail dealer’s alcoholic beverage permit or license where the sale of alcohol is not the main business may employ a person under 18 if the employment does not involve the sale, mixing, dispensing, or serving of alcoholic beverages for consumption on the premises.
  • In any establishment or occupation that the Executive Director of the Louisiana Workforce Commission determines hazardous or injurious to the life, health, safety, or welfare of the minor.

Theatrical Employment

A minor under 16 may not be employed, exhibited, used, or trained for exhibition in the following occupations:

  • As a rope or wirewalker, gymnast, wrestler, contortionist, stunt rider, or acrobat on a bicycle or other similar vehicle or contrivance.
  • In any illegal, indecent, or immoral exhibition or practice.
  • In an exhibition as insane or idiotic or when presenting the appearance of any deformity or unnatural physical formation or development.
  • In any practice, exhibition, or place considered to be dangerous or injurious to the minor.

Permitted Employment

Employment of minors 16 or older who are enrolled in or have completed an accredited nautical science-training program upon a vessel that is documented or registered under the laws of the United States is permitted.

Hours of Employment

Minors 14 and 15 may be employed after school hours and during nonschool days. Additionally, minors under 16 may not be employed under the following criteria:

  • More than eight hours in any one day.
  • More than six consecutive days or 40 hours in one week.
  • More than three hours on any school day.
  • More than 18 hours in any one school week.

The school calendar of the school in which the minor is enrolled or the public school calendar for the district in which the minor resides is used to determine a school day or week.

Minors who have not graduated from high school are bound by the following provisions:

  • Minors under age 16 may not be employed between the hours of 7 p.m. and 7 a.m.; except from June 1st through Labor Day at which time the permissible hours are extended to 9 p.m. Minors who are employed in the dairy industry are exempt from this restriction.
  • Minors 16 years of age may not be employed between the hours of 11 p.m. and 5 a.m. prior to the start of any school day.
  • Minors 17 years of age may not be employed between the hours of 12 a.m. and 5 a.m. prior to the start of any school day.

Additionally, a minor who has taken and passed a General Education Development test (GED) and who has been awarded a high school Equivalency Diploma from the Louisiana Department of Education will be considered to have graduated from high school.

Note: Employment of minors also is subject to the provisions of any local curfew ordinance.

Meal Periods

No minor may be employed for any five-hour period without one interval of at least 30 minutes for meals. If the period of work before the interval exceeds five hours by 10 minutes or less, that difference is considered de minimis and not a violation of the law. The interval may not be included as part of the working hours of the day and the interval must be 30 minutes.

If the length of the meal break is at least 20 minutes, the difference between the actual break time and the required 30-minute break time is considered de minimis, and is not considered a violation of the law. The break must be documented, using the employer’s normal timekeeping system. If a minor fails to clock in or out for a work period or meal break, and a time edit is necessary, the time edit must be documented and acknowledged in writing by the minor and the manager who performs the time edit.

Presumption of Employment

The presence of any minor under 16 in any place of employment prohibited to the minor and observed to be performing work duties on the employer’s behalf constitutes prima facie evidence of the minor’s employment therein.

Employment Certificates

An employer of minors must keep on file an employment certificate for each minor, except for those minors employed in approved federally funded youth training programs and those minors employed in theatrical, modeling, motion picture or television production, musical occupations, or in other performing arts. The certificate must be accessible on the jobsite at all times and available to any officer charged with the enforcement of Louisiana’s child labor law.

Employment certificates will be issued upon the application by the minor desiring employment along with a written permission from the minor’s parent or legal guardian. The issuing officer must approve the following papers before issuing a certificate:

  • A signed statement from the prospective employer stating the nature of the occupation, the number of hours per day and per week, and the wages the minor is to receive.
  • One of the following proofs of age:
    • Birth certificate.
    • Baptismal certificate.
    • Contemporaneous bible record of birth.
    • Passport or certificate of arrival in the United States showing the age, dated at least two years prior to the application date.
    • Life insurance policy covering the minor, dated at least two years prior to the application date.
    • School record or school identification showing the minor’s age.
    • Current valid Louisiana driver’s license or other state-issued identification, including a special identification card, with the minor’s date of birth.
    • An affidavit signed by the minor’s parent or legal guardian showing the minor’s name, date and place of birth, and a statement that no other proofs of age can be produced.

Employment certificates, including those for home study students, may be issued by any of the following:

  • The parish or city public school superintendent or designated agent.
  • The principal of a public or private school or designated representative.

If the student is a home study program participant, the employment certificate may be issued by any person authorized by the Louisiana Workforce Commission.

The superintendent of the parish, city, or other public school governing authority or a designee, or the private school principal or a designee, must completely fill out and electronically submit the Employment Certificate Interactive Form located on the Louisiana Workforce Commission’s website. The online employment certificate, which includes the information that was entered onto the Department of Labor’s employment certificate database, is to be printed, signed by the minor and the issuing authority, and presented to the minor for delivery to the employer. The employment certificate must be signed by the minor in the presence of the issuing authority and then it must be returned to the minor for delivery to the employer. An employment certificate is valid only for the employer for whom issued, and the employer is required to maintain it on file for a period of 14 days after the minor’s termination of the employment.

Under certain circumstances, such as athletic events, exhibitions, fairs, carnivals, or similar events, the Assistant Secretary of the Office of Regulatory Services may authorize the issuance of a blanket work permit. Blanket permits expire 60 days after issuance.

Recordkeeping Requirements

Every employer of a minor must keep on file an employment certificate or work permit for each minor, except for those employed in approved federally funded youth training programs and those minors employed in theatrical, modeling, motion picture or television production, musical occupations, or in other performing arts. The certificate or permit must be accessible on the jobsite or in the immediate area of the work location at all times and available to any officer charged with the enforcement of Louisiana’s child labor law.

The executive director or authorized representatives may have access to the employment certificates kept on file by the employer as well as all other records that may aid in the enforcement of the child labor law.

Notice Requirements

Every employer must keep conspicuously posted in the establishment a printed abstract of Louisiana’s child labor law and a list of the occupations prohibited to minors. The Executive Director of the Louisiana Workforce Commission may furnish these abstracts.

Enforcement

The executive director or an authorized representative will visit and inspect — at all reasonable times and as often as possible — all places where minors are employed. The secretary or authorized representative may have access to the employment certificates kept on file by the employer as well as all other records that may aid in the enforcement of the child labor law.

Penalties

Any person who violates Louisiana’s child labor law by refusing to allow inspection of the workplace, obstructing enforcement of the law, hiding minors, or helping them escape from a law enforcement officer will be fined between $100 and $500, imprisoned between 30 days and six months, or both. In addition to criminal penalties, anyone who violates the state’s child labor law will be liable for a civil penalty of up to $500. Each day in which a violation continues and each minor employed illegally constitutes a separate offense.

Any talent agent or person who employs, exhibits, uses, or trains for the purpose of exhibition, or who consents or neglects to restrain a minor from engaging in theatrical employment illegally will be guilty of contributing to the delinquency of minors. Upon conviction, such a person will be fined up to $1,000, imprisoned for up to two years, or both and will be liable for a civil penalty of up to $500.

Employers who unlawfully hire minors under 18 to drive school buses will be fined between $25 and $500, imprisoned for up to six months, or both.

Child Performer Trust Act

The Child Performer Trust Act (located at La. Stat. Ann. §§ 51:2131 – 2135) applies to any contract in which a minor is employed or agrees to render artistic or creative services for compensation of $500 or more in Louisiana, which is not otherwise prohibited by law, directly or through a third-party individual or personal services corporation, a loan-out company, or through an agency or service that provides artistic or creative services including, but not limited to, a casting agency or other similar entity.

Artistic or creative services include, but are not limited to, the following services:

  • Actor or actress.
  • Dancer, musician, comedian, or singer.
  • Stunt person or voice-over artist.
  • Any other performer or entertainer in any motion picture, television, radio, theatrical, or sports production or commercial production.

Every contract executed by or on behalf of a minor rendering artistic or creative services for compensation must require that 15 percent of the gross earnings for the minor, under the contract, be placed in a trust fund created for the minor’s benefit. Prior to the execution of any such contract the trust must be established, unless an account was previously established, and the trustee must provide the employer with a written statement that includes the particulars of the trust. Employers may require more information from the trustee prior to executing the minor’s contract.

In the event that a trust account was not established on behalf of a minor performer within 30 days of the last day of employment, the employer must forward the 15 percent of the minor’s gross earnings, accompanied by the name of the minor, and, if known, the minor’s address and Social Security number, to the Louisiana Treasurer, who will hold the funds in trust to be transferred to a trust account that is subsequently established on behalf of the minor. However, if no such trust account is established, the minor will receive the trust monies upon reaching age 18. After completing the transfer to the treasurer, the employer has no further duty or obligation with respect to the transferred monies.

Education Requirement

Every contract or employment arrangement agreed to by parties subject to the Child Performer Trust Act must include provisions for the education of the minor being employed to render artistic or creative services. If a minor is absent from school for two or more days within a 30-day period, the employer must do the following:

  • Employ a certified teacher beginning on the second day of employment.
  • Ensure that the teacher provide a minimum of three education instruction hours per day to the minor, pursuant to the lesson plans for the particular minor, as provided by the principal and teachers at the minor’s school.
  • Ensure that there is a teacher-to-student ratio of one teacher for every 10 students.

Note: No minors’ employment regulated under the Child Performer Trust Act may occur without the issuance of a written permit from the Louisiana Workforce Commission.

Contact Information

Louisiana Workforce Commission
www.laworks.net