ERISA stands for the Employee Retirement Income Security Act. It is a federal law that covers the administrative aspects of employee benefit and retirement plans. Employers who offer employee welfare benefit plans are subject to its provisions. Your ERISA obligations may be managed by your benefits administrator or insurance company.
What Types of Benefits Does ERISA Cover?
ERISA covers a wide variety of employee welfare benefit plans. Benefits covered by ERISA include any plan that an employer maintains to provide:
- Benefits for sickness, accident, disability or death;
- Medical, surgical or hospital care;
- Unemployment benefits;
- Apprenticeship and training programs;
- Day care centers;
- Vacation benefits;
- Prepaid legal services; and
- Retirement plans.
What are Some of the Main Administrative Requirements Under ERISA?
Plan administrators do most of the work regarding compliance when it comes to ERISA requirements. You may not have to do much of anything unless you are acting as your own plan administrator. In many cases, your insurance company acts as the plan administrator and takes care of the obligations. But it is still important to know the requirements so that you can make sure that your business is meeting ERISA obligations. The three main components of ERISA compliance are reporting, disclosure and paying claims. The following are the main features:
- Reporting: Plan administrators are required to file a summary plan description with the Department of Labor and the IRS. The summary plan description must include an explanation of the coverage levels and claims procedures of your plan. When modifications to a plan have been made, such as increased or decreased coverage, you are required to report this.
- Disclosure: Plan administrators must disclose information to the plan participants upon request. Plan participants can get information about coverage levels and financial information.
- Processing Claims: Any plan that is subject to ERISA is required to establish a claims procedure so that claims for benefits can be processed. Participants must be provided with information about their claims when their claims are denied.
Who is Exempt From ERISA?
What are Some of the Forms Required by ERISA?
You most likely have to complete the IRS and Department of Labor forms. Some of these forms include:
- IRS forms: If you have a welfare plan, you are required to file an annual report with the IRS. Typically, all of the other forms required by the IRS for retirement plans do not have to be filed by welfare plans.
- Department of Labor forms: Welfare plans must file many different forms with the U.S. Department of Labor. But small welfare plans are exempt from most of them. A welfare plan that has fewer than 100 participants whose benefits are fully insured would be considered exempt. Welfare plans where the benefits are paid from the employer’s general assets would also be exempt.
Do I Need an Employment Attorney for ERISA Violation Claims?
Ensuring ERISA compliance can be complicated, especially if you were to file a claim against an employer for an ERISA violation. Likewise, employers who are facing a claim for an ERISA violation may have to deal with a complicated process. Either way, you may want to consult an experienced employment law attorney to determine ERISA compliance.