ERISA Law

ERISA- Employee Retirement Income Security Act of 1974

Introduction

ERISA is a law composed of federal regulations that cover qualifying employee benefit plans and incorporates both related Internal Revenue Code provisions and labor law provisions. ERISA is designed to protect the rights of participant beneficiaries of these benefit plans, offered by employers and unions, and includes pension plans and welfare plans for workers, established to provide health, disability, death, vacation and training benefits, prepaid legal services, scholarship funds and more.  ERISA requires that these plan providers enforce standards and honor various fiduciary duties. ERISA law does not cover plans maintained for employees by the government or churches, or funded entirely by a separate insurance carrier.

Rules and Regulations

ERISA mandates that a plan provider must inform participants regarding their plan and benefits they are entitled to. Under ERISA, anyone who is affected by this law has the right to request information about ERISA or specific plan details any time. ERISA also requires most plan providers file an annual report regarding the plan’s operations and financial specifics.   As previously mentioned, those that provide benefits plans and administer them are bound by fiduciary duties.  “Fiduciary duty” means that plan providers have a responsibility to act in the best interest of the plan participants at all times. They have the duty to provide benefits, manage the plan in a professional manner, and handle administrative costs.

COBRA

The COBRA law, within the purview of ERISA, allows some participants to continue their health benefits coverage even in the event of unemployment.

Participant Rights

ERISA gives plan participants the right to sue a plan provider for benefits or compensation when fiduciary duties have been breeched by a plan provider. ERISA also provides for civil penalties against plan providers who fail to meet annual reporting requirements or who engage in actions that are prohibited by ERISA.   If a participant has suffered losses relating to their pension or welfare plan, if plan information has not been fully disclosed, or if the provider has in any way violated the participant’s rights or best interest in plan coverage, the participant has the legal right to seek compensation for their losses.