Overview: The Employee Retirement Income Security Act (ERISA) sets minimum standards for pension, health and other welfare plans (e.g., life insurance, disability) in order to provide protection to participants in these plans. ERISA applies to private employers that provide employer-sponsored retirement, health and welfare benefit plans to employees.
ERISA does not require employers to offer benefit plans but regulates and sets standards for:
Two amendments to ERISA have expanded protection to participants and beneficiaries in health plans. The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides employees and their families the opportunity to continue their health coverage after certain qualifying events, and the Health Insurance Portability and Accountability Act (HIPAA) provides protection to individuals with pre-existing medical conditions. Other important amendments to ERISA include the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act and the Women's Health and Cancer Rights Act.
Trends: Communicating benefit plan information to employees is still an area of exposure for employers. If not done properly, employers run the risk of being liable for breach of fiduciary duty. To avoid this liability, employers should be sure to control the flow of information concerning benefits and ensure designated representatives are well-trained and can provide timely and accurate information.
Author: Tracy Morley, SPHR, Legal Editor
Updated to reflect details on the 'substantially all/predominant' analysis and on the information-disclosure requirements under the Mental Health Parity and Addiction Equity Act.
Updated to reflect the Department of Labor's final ERISA fiduciary rule.
The US Department of Labor has released its Final Fiduciary Rule under the Employee Retirement Income Security Act (ERISA). The Final Rule streamlines many of the more burdensome aspects of the proposed rule and stresses the importance of eliminating any potential conflicts of interests.
A federal court has denied an employer's motion to dismiss a proposed class action lawsuit, Marin v. Dave & Buster's, Inc. The lawsuit alleges that the employer violated the Employee Retirement Income Security Act (ERISA) by reducing workers' hours in anticipation of higher costs under the Affordable Care Act (ACA).
A downward trend in the size of settlements reversed last year, as plaintiffs figure out ways to work around a Supreme Court ruling that made it more difficult for plaintiffs to prove commonality to bring a class action.
The US Supreme Court has confirmed that plan fiduciaries have a continuing obligation to monitor investments in a plan under § 401(k) of the Internal Revenue Code (IRC). Plan fiduciaries need to take concrete steps to minimize liability risks.
The Supreme Court has ruled unanimously that a group of retired employees are not necessarily entitled to permanent, contribution-free health care benefits. Writing for the Court, Justice Clarence Thomas said, "Employers or other plan sponsors are generally free under ERISA at any time to adopt, modify or terminate welfare plans."
Employers seeking to advise employees of any retirement benefits offered to employees as part of their overall benefits package should consider including this model policy statement in their handbook.
Despite receiving an unclear request, a benefits plan administrator was liable under ERISA for failing to timely provide requested plan documents. The 6th Circuit has adopted the "clear notice" standard, but ruled that the administrator knew or should have known which documents were requested.
HR guidance on complying with ERISA requirements.