Erisa

ERISA Paper

Many individuals have or had money invested within the companies they work for. A few persons may have had certain benefits and the company was not paying their part of the benefits properly. A number of companies went bankrupt or just went out of business and the monies invested by these individuals would be lost. There had to be a law made to protect individuals and the benefits. The Employment Retirement Income Security Act is a federal law that was established in 1974. The Act protects certain benefits and imposes certain requirements on the plan administrators.

HISTORY

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. ERISA just does not only cover qualified retirement plans, but also employee benefit plans including medical, life, accident, disability, death, unemployment, vacation, apprentice and training programs, scholarship funds, prepaid legal services, holiday pay, and severance pay. 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 are not covered by ERISA. Plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans are not covered by ERISA (Martocchio, 2003).

BENEFITS

There have been a number of amendments to ERISA, expanding the protections available to health benefit plan participants and beneficiaries. One important amendment, the Consolidated Omnibus Budget Reconciliation Act (COBRA), provides some workers and their families with the right to continue their health coverage for a limited time after certain events, such as the loss of a job. Another amendment to ERISA is the Health Insurance Portability and Accountability Act (HIPAA) which provides important new protections for working Americans and their families who have preexisting medical conditions or might otherwise suffer discrimination in health coverage based on factors that relate to an individual's health. Other important amendments include the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act, and the Women's Health and Cancer Rights Act (Unknown, 2007).

REQUIREMENTS

ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty. It requires employers to have a plan administrator who evaluates claims for benefits and makes payments as appropriate. Under ERISA, plans must also have a written claims procedure for claimants to appeal denial of benefits. Plan administrators must also provide a Summary Plan Description (SPD) providing plan details to all participants, and file Form 5500, which includes detailed plan financial information with the IRS (Wikipedia, 2007). The Pension Benefit Guaranty Corporation (PBGC) is a government corporation created by ERISA to