Your ERISA Questions Answered

Employees are the most important part of any business. For this reason, the government crafts and updates many policies and laws that ensure employee rights are not violated. When it comes to retirement and health benefits, employers must follow the Employee Retirement Income Security Act of 1974 (ERISA) guidelines. If you would like to learn more about ERISA, keep reading.

What Is ERISA?

ERISA is a federal law to protect employee benefit plans. For the most part, it protects against the mismanagement and abuse of retirement funds. This ensures the people handling the money are held to high standards and must act in the best interest of you and your finances.

In addition, ERISA also covers a lot of non-retirement, employee health plans. These include health maintenance organizations, health reimbursement accounts, flexible spending accounts, disability insurance, and life insurance. To stay compliant with ERISA guidelines, companies are required to provide reports to the government on what they are doing and how they are doing.

What Does ERISA Do?

ERISA does a lot to protect you. First, it requires that employers must provide all participants with important information about their benefit plan, including features and funding. In addition, it sets minimum standards for companies to follow, such as requiring years of experience in the field before handling a plan.

ERISA also puts more accountability on plan fiduciaries, which includes anyone who offers investment advice. These rules require plan fiduciaries to follow the principles of conduct. If they do breach the principles of conduct, ERISA gives you the right to sue for financial compensation.

What Are Your Rights Under ERISA?

ERISA also provides a lot of rights to help you. First, you have the right to receive information about the plan and benefits. Under ERISA, you are legally allowed to access all documents governing the plan free of charge at the plan administrator's office (usually your HR department). You can also request copies for a fee, and the company must provide a summary of the plan's annual report.

In addition, ERISA protects your right regarding group health coverage. Without ERISA, if you lose your job, you immediately lose your health benefits. ERISA, however, requires employers to provide COBRA benefits. With COBRA, you still get the same group coverage at the group price. However, since you are no longer employed, the employer won't pay part of the benefits. So you keep your benefits, but the full cost of the premium falls on you.

What Do You Do If Your ERISA Rights Get Violated?

Despite the laws, some companies may purposefully or accidentally violate ERISA regulations. Some of the most common violations include wrongful denial of benefits, breach of fiduciary duty, and interference with the rights of employees. If this happens, the employer may face civil or criminal penalties.

If you believe your rights have been violated, you should first file a complaint against the person or business that violated your rights. You may also want to take action via the Employee Benefits Security Administration, which enforces laws related to ERISA.

If the violations are considered civil, the offending company may have to pay fines and change procedures that violate ERISA. In addition, they may be required to pay you for damages. If the violation is considered criminal, the fee could be as high as $100,000, and the person who violated ERISA rights may face up to 10 years in jail. If the defendant is a company instead of an individual, the fines can reach as high as $500,000.

ERISA protects you in many ways, and it puts strict standards on fiduciaries. Despite this, some companies make mistakes and violate your rights or break the law. If you think your ERISA rights have been violated, or if you want to learn more, contact us at the Law Offices of James B Gillespie, Jr., PLLC today.