Employee benefit plans 101: protect yourself by knowing the basics

If you have a benefit plan at work, those benefits likely make up a significant part of your total compensation. This can include not only health insurance and retirement-plan contributions, but also disability insurance, employee-stock options, profit-sharing plans and other benefits.

But what type of protections do you have if your employer isn't honoring their side of the bargain?

In this post, we will use a Q & A format to provide a high-level overview of a federal law called ERISA that contains important protections for employee benefits.

What is ERISA?

The Employee Retirement Income Security Act (ERISA) is a complicated federal law passed in 1974. The original intent of the law was to protect pension rights, so that companies would not get out of paying the retirement funds earned by employees.

Does ERIA apply to benefits besides retirement plans?

Yes. As ERISA has evolved, it has come to apply to other benefits besides retirement plans. It also now applies to benefits that include disability insurance, medical coverage and life insurance.

What does ERISA do?

ERISA requires employers who offer qualifying plans to provide participating employees with information about those plans. It also creates standards that allow participants to challenge employers who fail to meet their commitments. The challenge could be in an internal grievance or appeal procedure or, if necessary, in federal court.

Are there any recent changes in ERISA to be aware of?

Yes. On April 1, the U.S. Department of Labor put in place a new rule on the processing of claims. The rule is supposed to give workers more protections regarding denied disability claims and could also affect other types of benefits.

The protections the rule provides include the right to receive clear reasons for the claim denial and to be informed of the right to appeal.

How can ERISA help employees in a dispute about benefits?

If you get into a dispute with your employer about your benefits, ERISA may come into play for you in a positive way. Your attorney can use the standards established in the ERISA law to help bring your claim forward.

 

 

 

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