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 information on the status of the fiduciary rule.
A joint resolution that nullifies a Department of Labor, Employee Benefits Security Administration rule advising states on auto-enrollment IRAs is headed to the President's desk.
Congress has voted to overturn the US Department of Labor rule regarding auto-enrollment IRAs. The joint resolution now heads to the President's desk for signature.
The US Department of Labor (DOL) has issued a temporary enforcement policy relating to its recently proposed 60-day extension of the applicability date of the final rule defining who is a "fiduciary" under ERISA.
In the interest of encouraging retirement savings to protect the economic security of older Americans, the Department of Labor's Employee Benefits Security Administration has issued a final rule guiding states on how to design payroll deduction savings initiatives with automatic employee enrollment (auto-IRAs) without being preempted by the Employee Retirement Income Security Act (ERISA). The final rule also provides guidance to the employers that eventually may be required to offer such programs to employees.
Updated to reflect increased ERISA civil penalties, effective August 1, 2016.
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.
Employment glossary definition of ERISA (Employee Retirement Income Security Act).
HR guidance on complying with ERISA requirements.