Being an employee is not an easy task, as you spend your days getting up early, going to work, staying in the office till the evening, getting caught up in rush hour, and when it is time for your retirement, you are denied your benefits. Under ERISA, however, your company cannot do that. ERISA protects the rights of employees, not only for retirement benefits, but also for health plans and life insurance.
What Is ERISA?
ERISA is the Employee Retirement Income Security Act, and it protects the rights of employees in the private sector by ensuring that they get all the benefits that they were promised by their employers. It was initially founded to tackle the issue of bad pension funds, but now it covers a range of plans. It can be used to cover a lot of plans like retirement plans, health plans, training programs, disability benefits, and life insurance.
Key Requirements of ERISA Compliance
Here are some of the key ways ERISA ensures that employees get the benefits that they deserve:
Plan Documentation
According to this, employers must keep a document that has all the rights of the employees written down in a Summary Plan Description or SPD and have complete documentation of the plan that the company provides, like who is eligible for it, rights of employees and employers, benefit accrual methods, and vesting schedules. Apart from this, the employees need to be appropriately informed if any changes are made to the plan and need to be told about any updates or important dates in it.
Fiduciary Responsibilities
A fiduciary under ERISA is anyone who manages the assets of such a plan and must act in the participant’s best interest and must be completely transparent in all the processes and when giving advice. They need to analyze and think carefully, avoid any conflict of interest, and perform all their duties timely and in the best possible manner, as they are under a legal obligation to do so.
Claims and Appeals Process
If your company denies you the rights that your employer has promised you, according to ERISA, you can file legal complaints. For this, you will need the plan administrator to write a letter highlighting the reason for the denial. After this, you should submit an appeal, and you should also provide any extra documentation required that would support your appeal. Getting your appeal listened to is also one of your rights.
You should also get help from legal experts who can guide you through the process, give expert opinions on what you should do, collect evidential information, and even represent you in court. If your appeal is denied, you have the right to file a lawsuit and go to the federal court so a judge can decide whether the benefit plan complies with ERISA standards.
How to Stay ERISA Compliant
It is not very hard to stay ERISA compliant. You just need to update your benefits plan to meet ERISA requirements continuously. If you do not have team members who can do that for you, you can hire an ERISA compliance team, which are ERISA rules experts and can help you stay up to date, and let you know about any changes in ERISA regulations. They can also help companies with government investigations and audits, and can advise fiduciaries on how to avoid risk and what the best things they can do to avoid it are.
Consequences of Non-Compliance
Not complying with ERISA rules, or not filing reports, or providing requested documents could be very bad for your business, as the Department of Labor can fine you, and your employees can also sue you. Obviously, this will badly affect your business reputation. Failure to file Form 5500 can result in daily penalties of $2670. ERISA can also prosecute you for violating its terms.
Conclusion
ERISA protects the rights of employees when it comes to their health, retirement, disability, and insurance benefits, and makes employees feel secure and confident about their rights so that they can fulfill all their duties wholeheartedly, and since ERISA lets you make informed decisions and understand your rights, you can always make an appeal in case your rights are being violated and seek legal remedies.
