There is a lot to keep track of when it comes to understanding the health and retirement plans your job offers. Thick bundles of documents show up in your mailbox, links to plan information clutter your email, and you get to sort through it all.
Employers don’t just do this on a whim. There is actually a federal law known as ERISA – the Employee Retirement Income Security Act – that outlines minimum standards for how companies handle those health and retirement plans, as well as how information gets communicated to you. Because more than half of American workers earn these types of benefits from their job, it’s a good idea to have an understanding of what ERISA is and how it is set up to protect people.
What ERISA covers
Established in 1974, ERISA lays out a number of guidelines for plan administrators (the people who manage the plans). Many of the requirements concern informing plan participants of certain things. For example, participants must get:
- A summary of benefits and plan features
- An explanation for how to file a claim
- A notice if features of the plan change
- Directions for filing an appeal or grievance
- Information on plan funding
It’s important to note ERISA only applies to employer-sponsored plans offered to workers. The law does not cover plans offered by government entities or churches, nor does it affect privately purchased plans.
Breach of fiduciary duty
ERISA also mandates that fiduciaries (the person or people who manage all the assets) “act in the best interests of plan participants.” If that doesn’t happen and the fiduciary mishandles or abuses the assets – potentially resulting in a loss – the law allows people to sue for breach of fiduciary trust.
Your health and future should always be treated with the utmost care. If you believe that hasn’t happened, ERISA makes legal action a possibility.