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
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.
Updated to reflect IRS guidance issued in January 2016 on the elimination of the determination letter staggered cycle.
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 Employee Retirement Income Security Act (ERISA) requires plan sponsors to meet fiduciary, reporting and disclosure requirements. ERISA also sets minimum standards for participation, vesting, benefit accruals and funding. This Legal Insight focuses on a plan sponsor's fiduciary and disclosure responsibilities under ERISA and explains how to navigate DOL regulations and enforcement activities.
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.
Notice 2014-19, issued by the IRS, provides guidance on how qualified retirement plans should treat same-sex spouses. The notice also requires qualified retirement plans to recognize the same-sex spouse of a participant. and provides plan participants with important rights with respect to certain aspects of a qualified retirement plan.
Recent guidance issued by the US Department of Labor states same-sex spouses are now eligible for the same benefits and protections as opposite-sex spouses under employee benefit plans and programs covered under the Employee Retirement Income Security Act.
The Supreme Court's ruling striking down Section 3 of the Defense of Marriage Act raises significant issues related to the administration of employee benefit plans.
HR guidance on complying with ERISA requirements.