The Employee Retirement Income Security Act of 1974 (ERISA) sets uniform minimum standards to ensure that employee benefit plans are established and maintained in a fair and affordable manner. Employers are obligated to provide benefits and satisfy ERISA’s requirements for managing and administering private pension and welfare plans. ERISA sets minimum standards for most voluntarily established pension and health plans in the private industry to provide protection for individuals in these plans. ERISA applies to employee benefit plans, including welfare benefit plans, with some exceptions.
ERISA requires plans to provide its participants with plan information including important information about plan features and funding, provide fiduciary responsibilities for those who manage and control plan assets, require plans to establish a grievance and appeal process for participants to get benefits from their plans and give participants the right to sue for benefits and breaches of fiduciary responsibility.
Welfare benefit plans must meet ERISA rules on:
- Reporting and disclosure to participants and the Department of Labor
- Benefit claims procedures and denials
- Fiduciary responsibility
- Prohibited transactions
Plans subject to ERISA:
- Medical, surgical or hospital care
- Benefits for accident, disability, sickness or death
- Unemployment benefits
- Vacation benefits
- Apprenticeship or other training programs
- Day care centers
- Scholarship funds
- Prepaid legal services
- Holiday and severance pay plans
Generally, ERISA does not cover group health plans established or maintained by governmental entities, churches for their employees or plans which are maintained solely to comply with applicable workers’ compensation, unemployment or disability laws. ERISA also does not cover plans maintained outside of the United States primarily for the benefit of nonresident citizens or unfunded excess benefit plans.