The evolving story of small business employee benefit plan documents

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December 4, 2014 by Tony Novak

There is more on the use of my small business employee benefit prototype documents. Here is the evolving story line:

1) I have compiled a collection of many (perhaps 50-100) sample employee benefit plan documents from a number of sources over 20+ years in practice. Some documents are required by law, others are used as a matter of good management practice.

2) I believe the documents to be public domain. Most have been modified, edited, evolved over time much like folk songs so that I cannot clearly identify the source. Some were originally published by government agencies like the IRS. I certainly do not own copyrights to them.

3) In the past I published the employee benefits plan library online and made the documents available free of charge to anyone. Sometimes people would call for advice after finding the online library and occasionally this led to a consulting engagement.

4) The implementation of the Affordable Care Act greatly increased the number of businesses looking for and apparently using non-compliant employee benefit plans especially reimbursement plans.

5) My first reaction was to limited the use of the library to professionals: mostly accountants and attorneys.

6) In 2014 an insurance-related business owner consulted his attorney who apparently felt that my online library and previously published articles on these topics contribute to the confusion and non-compliance.

7) I removed the library from public domain.

8) I have a new set of small business employee benefit plan documents distilled from the library that serves as a framework, sort of like a Swiss Army Knife, for the full range of employee benefit options available today.

9) I make the documents available to my clients and their attorneys after normal screening for suitability.

10) My standard client engagement letter discusses that I am not an attorney and details the risks of using legal documents without an attorney. Yet I am aware that the large portion of small business owners do not consult an attorney on employee benefit planning issues or adapting employee benefit plans.

11) I was warned by a member associated with CPA professional standards regulation that my actions of offering free documents may be close to violating the rules on the practice of law without a license.

12) I sought legal advice from my attorneys but, so far, have no legal opinion upon which I can rely.

13) My own review of applicable case-law leads me to conclude that the ‘unauthorized practice of law” does not apply in opposition of the public interest. It can’t be illegal for a business owner to adapt an employee benefit plan document simply because she is unwilling to hire an attorney to prepare the document. Likewise, it is not illegal for me to offer sample prototype documents to small businesses for the primary purpose of promoting good management practices and compliance with tax law when such documents are not widely available from other sources.

13) Other aspects of “unauthorized practice of law” with regard to a small business employee benefits practice are not as clear. I believe that ERISA preemption applies (removing jurisdiction from state law) but have no clear authority for this position. Likewise, I believe that a fair use allowance as afforded to Realtors who use legal documents in the ordinary course of their work should also apply to employee benefits practice and yet there is no statutory or case-law authority for this position.

14) The primary resistance I face now is from those who say (no in these words): “All I want is to buy your documents that I read about online; I don’t want to hire an adviser” or  “I think I know the law and am willing to take a chance using the documents that way I wish”. In response, I find it necessary – and increasingly tedious – to relate the story #1 through #13 above to explain my position.


I’m still not sure where where this issue is headed but I’ll likely write about it when I do.

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