ERISA
ERISA, the Employee Retirement Income Security Act of 1974, is a federal law setting minimum standards for most voluntarily established private-sector retirement and health plans.
ERISA sets the rules most private-sector retirement and health plans run under once established; the Department of Labor describes these plans as voluntarily established. ERISA requires plans to give participants plan information, including information about plan features and funding, and gives fiduciary responsibilities to those who manage and control plan assets. Plans must have a grievance and appeals process for participants to get benefits, and participants have the right to sue for benefits and breaches of fiduciary duty. Later amendments, including COBRACOBRA. COBRA is the federal law that lets eligible employees and their covered dependents continue group health coverage for a limited period after a qualifying event.Click to open the term, added protections for health plan participants.
Which employee benefit plans does ERISA cover?
ERISA’s coverage section generally reaches any employee benefit plan established or maintained by an employer engaged in commerce or in an industry or activity affecting commerce, by an employee organization, such as a union, representing such employees, or by both. The same section then lists five kinds of plans its provisions do not apply to, even when an employer sponsors them. A church plan is one of them unless an election has been made for it under section 410(d) of the Internal Revenue Code.
| PLAN | COVERED BY ERISA? |
|---|---|
| Retirement or health plan of a private employer | Generally yes |
| Governmental plan | No |
| Church plan | No, unless a section 410(d) election is made |
| Plan kept solely to comply with workers’ compensation, unemployment, or disability insurance laws | No |
| Plan kept outside the U.S. primarily for persons substantially all of whom are nonresident aliens | No |
| Unfunded excess benefit plan | No |
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.