Guide to the Employee Retirement Income Security Act
The Employee Retirement Income Security Act (ERISA) is a federal law that regulates and establishes oversight for private industry pension plans, retirement plan, profit-sharing plans and health insurance coverage by establishing rules and minimum standards that are meant to protect plan participants. ERISA only governs private (non-government) employers with 25 or more employees.
ERISA does not mandate the creation of any these plans; it only sets the standards for those that choose to establish them. ERISA was amended by the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 1985 to include provisions for workers whose established health insurance coverage is affected by their employment situation. And a more recent amendment in 1996, the Health Insurance Portability and Accountability Act (HIPAA), protects the transferability and security of health care coverage for workers, especially when there is a pre-existing condition involved.
ERISA addresses the following aspects in its oversight: conduct of the individuals financially responsible for administration of the various plans; detailed documentation for reporting and accountability; the necessity of disclosing specific information about the plans to the participants; written policies for filing of claims and appeals, in a equitable and timely manner; and safeguards to protect funding of the plan and the non-discriminatory collection and distribution of the plan benefits.
ERISA also set up Individual Retirement Arrangements (IRA’s); created easier methods for self-employed workers to set up retirement plans; and added employee stock ownership to the tax code.
The Employee Benefits Security Administration (EBSA), a division of the Department of Labor (DOL), is the governing body responsible for administering and enforcing ERISA. When an insurance company denies a claim for benefits the consumer believes is covered by his/her plan, established appeals procedures, as detailed in the employer’s required Summary Plan Description (SPD), must be followed to appeal their decision. If denied again, the consumer may appeal a second time through either the insurance company or the regional EBSA office, depending upon the company’s established procedure.
Employers who fail to adhere to ERISA requirements face limited penalties. After exhausting all their administrative options, to pursue specific relief, plan participants must then file their ERISA legal claims in Federal Court. Damages are limited. Attorneys experienced in the practice of ERISA Law can assist these consumers with their claims and establishing their rights.
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ERISA Law - US
- ABA - Joint Committee on Employee Benefits (JCEB)
The ABA Joint Committee on Employee Benefits (JCEB) coordinates the activities of the employee benefits committees of six sections. Those activities include CLE programs and annual meetings with federal agency officials that are reported as a series of questions and answers from each agency.
- Consolidated Omnibus Budget Reconciliation Act of 1986 - ERISA and COBRA
Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA)(1) health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise would be terminated.
- DOL - ERISA Advisory Council
Section 512 of ERISA provides for the establishment of an Advisory Council on Employee Welfare and Pension Benefit Plans, known as the ERISA Advisory Council. The duties of the council are to advise the Secretary and submit recommendations regarding the Secretary's functions under ERISA.
- Employee Retirement Income Security Program - Chapter 18
ERISA requires plans to provide participants with plan information including important information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; gives participants the right to sue for benefits and breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).
- ERISA Industry Committee (ERIC)
Since 1976, The ERISA Industry Committee (ERIC) has remained the only organization in Washington, DC committed exclusively to the employee benefits interests of America’s major employers. Our action on legislation, regulations, and other matters is determined solely by our members who are directly responsible for benefits policy within their companies. As a result, ERIC has been extremely influential and successful in its efforts and its mission.
- IRS - Employee Plans
In 1974 the Employee Retirement Income Security Act of 1974 (ERISA) was signed into law. It completely revised the legal framework of the qualified pension plan and made significant changes in the areas of minimum participation, vesting, benefits, surviving spouse benefit protection and minimum funding requirements.
- National Association of Insurance Commissioners
The mission of the NAIC is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members:
- Pension Benefit Guaranty Corporation (PBGC)
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of more than 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans.
- United States Department of Labor - ERISA Enforcement
The Employee Benefits Security Administration published this manual solely for the internal administrative use of its employees. This manual does not restrict or limit in any way the Employee Benefits Security Administration's discretion in carrying out responsibilities imposed on the Secretary of Labor by the Employee Retirement Income Security Act. Nothing in this manual is intended to be an interpretation of law or regulation or to serve as guidance for persons outside the Department of Labor. Nor does this manual confer on any person, including one who is the subject of an Employee Benefits Security Administration investigation or enforcement action, a right to rely on any policy or procedure stated herein, or otherwise create any other substantive or procedural rights.
Publications Related to ERISA Law
- An Employee's Guide to Health Benefits Under COBRA
Health insurance programs help workers and their families take care of their essential medical needs. These programs can be one of the most important benefits provided by an employer. There was a time when employer-provided group health coverage was at risk if an employee was fired, changed jobs, or got divorced. That substantially changed in 1986 with the passage of the health benefit provisions in the Consolidated Omnibus Budget Reconciliation Act (COBRA). Now, many employees and their families who would lose group health coverage because of serious life events are able to continue their coverage under the employer's group health plan, at least for limited periods of time.
- Frequently Asked Questions about Pension Plans and ERISA
ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit.
- TIAA-CREF - About ERISA
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that establishes legal guidelines for private pension and employee benefit plans. ERISA requires plans to provide participants with specific information about plan features and funding and establishes certain fiduciary responsibilities for those who manage the plan.