HR Support with Ensuring ERISA Compliance

Editor's Note: Ensure compliance with reporting, disclosure and fiduciary requirements.

Tracy MorleyOverview: 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:

  • Reporting Requirements, including filing Form 5500 (the annual return/report of employee benefit plan) and related schedules;
  • Disclosure Requirements, which include providing participants with the summary plan description (SPD), summary annual report (SAR) and summary of material modifications (SMM); and
  • Fiduciary Responsibilities by requiring plan fiduciaries to ensure the plan is maintained in the interest of participants and beneficiaries; to act prudently in an effort to minimize risk and to administer the plan in accordance with the terms of the plan document and ERISA requirements.

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

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