What is ERISA?ERISA stands for The Employee Retirement Income Security Act of 1974. ERISA establishes minimum standards for retirement, health, and other welfare benefit plans (including life insurance, disability insurance, and apprenticeship plans).
Who Administers ERISA?
ERISA is administered by the Employee Benefits Security Administration (EBSA), a division of the U.S. Department of Labor (DOL). Complaints, concerns, and questions about ERISA laws should be directed to your local office.
Who Must Abide by ERISA Law?
The protective laws under ERISA only apply to private employers (non-government) that offer employer-sponsored health insurance coverage and other benefit plans to employees. ERISA does not require employers to offer plans; it only sets rules for benefits that an employer chooses to offer.
ERISA laws do not apply to privately purchased, individual insurance policies or benefits.
What Are Provisions Under ERISA?
According to TASC, a well-known third-party plan administrator, ERISA regulates and sets standards and requirements for:
- Conduct: ERISA rules regulate the conduct for managed care (i.e., HMOs) and other fiduciaries (the person financially responsible for the plan's administration).
- Reporting and Accountability: ERISA requires detailed reporting and accountability to the federal government.
- Disclosures: Certain disclosures must be provided to plan participants (i.e. Plan Summary the clearly lists what benefits are offered, what the rules are for getting those benefits, the plan's limitations, and other guidelines for obtaining benefits such as obtaining referrals in advance for surgery or doctor visits);
- Procedural Safeguards: ERISA requires that a written policy be established as to how claims should be filed, as well as a written appeal process for claims that are denied. ERISA also requires (although the language is somewhat loose) that claims appeals be conducted in a fair and timely manner.
- Financial and Best-Interest Protection: ERISA acts as a safeguard to assure that plan funds are protected and delivered in the best interested of the plan members. ERISA also prohibits discriminatory practices in obtaining, and the collecting on, plan benefits for qualified individuals.
Other Areas Addressed Under ERISA
ERISA has been amended to include two additional areas that specifically address health insurance coverage. These laws are:
- The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); and
- The Health Insurance Portability and Accountability Act of 1996 (HIPAA).