In this article, our Augusta ERISA disability attorney explains the expansion of the 1974 Employee Retirement Income Security Act.
Employee health and welfare is an important concern for all companies. However, prior to 1974, organizations often made questionable decisions with voluntary plans for their staff. With the Employee Retirement Income Security Act of 1974 (ERISA), the federal government established minimum requirements for all retirement, health, and welfare plans provided by private companies. Although many of the benefit plans covered by ERISA are provided on a voluntary basis by employers, an Augusta ERISA disability attorney stresses that if the benefit plans are offered, they must comply with the law.
About The Law Defined by our Augusta ERISA Disability Attorney
The main goal of ERISA is to protect plan participants. ERISA is a complex law that “sets minimum standards for pension and health plans in private industry,” according to the U.S. Department of Labor. It offers guidance for the following types of voluntary benefit plans:
- Disability Insurance
- Life Insurance
- Health Insurance
- Vacation Plans
- Child Care Assistance
- Legal Assistance
- Other employee benefit plans that are voluntarily established and managed by an employer or union.
Although there are many different kinds of benefit plans, ERISA sets out general requirements that apply to everyone who participates in a private company’s retirement, health, or wellness plans.
In general, it specifies the following:
- Eligibility Guidelines – ERISA establishes minimum requirements for when an employee may become a participant, how long an employee may work before becoming vested in savings plans, how long an employee can be away from their job without affecting benefits, and whether spouses and partners have rights within the plans.
- Management of Funds – ERISA requires employers to take actions that are in the participants’ best interest when managing benefit plans. Fraud and mismanagement can result in a lawsuit.
- Discrimination – All types of discrimination in qualifying for benefit plans and retaining employment while utilizing benefit plans is prohibited.
Must All Employers Comply With ERISA?
ERISA applies to the retirement, health, and welfare plans of private employers and unions that were established after January 1, 1975. All plans developed prior to January 1, 1975, are independent of ERISA, although they must still comply with some federal laws.
If a private industry employer or union does establish a retirement, health, or welfare plan, it must comply with ERISA. However, ERISA does not apply to local, state, and federal government employee benefit plans. It also does not apply to the benefit plans of public school teachers or administrators. In general, church and other religious organization benefit plans are also exempt from ERISA.
What Does ERISA Do?
ERISA is a complex law that seeks to protect the participant. It does several things that can be applied across the board to all private employers with benefit plans and their participants.
- It requires plans to provide participants with certain information about plan features and funding regularly and automatically. Most of that information is free of charge; however, some of it may require a small fee.
- It establishes fiduciary responsibilities for the managers of benefit plan assets.
- Plans covered by ERISA must establish a grievance and appeals process for participants who are denied benefits or who have problems with plans.
- ERISA gives plan participants the right to sue companies for benefits and breaches of fiduciary duty.
ERISA covers all benefit plans differently. For example, it sets out detailed specific requirements for retirement plans, but more general minimum conditions for disability or life insurance plans.
It is important to keep in mind that the requirements of ERISA are only a minimum. Your plan may offer more generous benefits depending on your employer’s requirements. In order to find out the legal details of your plans, contact your human resources manager.
Amendments To ERISA
ERISA began as an Act that focused on retirement benefits; however, several amendments have expanded its reach.
- Health Insurance Portability and Accountability Act (HIPAA) – HIPAA was an amendment to ERISA in 1996. It protects the privacy and rights of health insurance plan participants and beneficiaries in group health plans. It limits exclusions for pre-existing conditions, prohibits discrimination based on health status, and allows individuals to enroll in plans under special circumstances outside of open enrollment dates.
- Consolidated Omnibus Budget Reconciliation Act (COBRA) – COBRA was amended to ERISA in 2009. It allows health insurance plan participants to continue group health benefits for a certain amount of time in the event of job loss, reduction of hours, or job transition.
- Newborns’ and Mothers’ Health Protection Act (Newborns’ Act) – This act was added to ERISA in 1996. It requires group health plans that offer maternity coverage to pay for at least 48 hours in the hospital after uncomplicated childbirth, or 96 hours after Cesarean section childbirth.
- Women’s Health and Cancer Rights Act (WHCRA) – WHCRA was amended to ERISA in 1998. It protects plan participants who have mastectomies. Health insurance plans must provide medical and surgical benefits to cover mastectomies and post-mastectomy reconstructive surgery.
- Mental Health Parity and Addiction Equity Act (MHPAEA) – MHPAEA was added to ERISA in 2008. It mandates equal coverage for mental illness and substance use disorders as is provided to other medical issues.
Understanding your ERISA plans could be difficult. Our Augusta ERISA disability attorney is available to assist you with questions you may have regarding your ERISA disability plan.