ERISA: Assured Benefits for Millions of Americans Employees

On September 2, 1974, 93rd United States Congress passed into law the Employee Retirement Income Security Act or ERISA, for the purpose of ensuring that upon their retirement, the millions of Americans will be able to enjoy the assets or the funds that were deposited in their retirement plan during the years that they worked. ERISA claims only apply in companies where employers have chosen to sponsor the health insurance coverage of the employees and other plans for the benefit of the same employees.

The administration of ERISA is the task of the Employee Benefits Security Administration (EBSA), a branch of the Department of Labor (DOL) of the United States. The Act does not mandate employers to offer plans to their employees; it merely lays down the rules for whatever benefits an employer would choose to offer. ERISA also means to protect the interests of all the participants (and their beneficiaries) in the employee benefit plans by:

  • Making sure that they are informed about all the vital information relating to the plans, such as their features and funding
  • Requiring these plans to formulate a process for grievance and appeals that will help the participants receive benefits from their plans
  • Providing fiduciary or trustee responsibilities for whoever will control and manage the plans’ assets
  • Giving the participants the right to file legal claims for benefits and violations committed by the fiduciary

For a clearer picture of what ERISA actually does, say for instance that an employer opts to sponsor a pension plan for his/her employees, ERISA will, then, lay down the minimum standards for the availment of such pension plan. These standards will specify the length of employment required for an employee to be accepted as a participant of the plan, the additional number of years necessary for an employee to enjoy non-forfeitable interests in their pension, the length of time allowed for a participant to be away from his/her job before his/her benefits are affected, and the right of the spouse to the pension in the event of the participant’s death.

In improving the benefits of employees, amendment were made to ERISA to include in it two areas that would cover health insurance: the first was COBRA or the Consolidated Omnibus Budget Reconciliation Act, which was approved in 1985; and, the second, HIPAA or the Health Insurance Portability and Accountability Act , which was passed in 1996.

To make sure that the stipulations of ERISA are complied with, EBSA monitors companies through reporting requirements. While failure to comply would result to criminal penalties and civil liabilities, compliance may earn for the company tax breaks and other incentives.

If you believe your insurance company acted in bad faith, be sure to contact an insurance law attorney as soon as possible so they can assess your situation. This way, you can get the insurance money that you need.