The Employee Retirement Income Security Act (ERISA) was passed in 1974 in an effort to protect the assets that members of the workforce earn in their retirement accounts. By setting the standard for pension plans offered by employers in the private sector, the act has assisted millions of Americans in accumulating a retirement that they can live off when they reach retirement age. ERISA not only helps educate Americans about pension plan features that are available to them, it also helps set a funding, accrual and participation standard that was not in force before the act came into effect. Read on, and learn more about the provisions of the act and how it helps the workforce today.
What Are the Provisions of the Law?
The Employee Retirement Income Security Act is a federal law that pertains to the retirement and health plan benefits that are offered voluntarily by private companies. The law states that an employer that offers these benefits to their employees must provide the participant with information on how the plan is funded and what the retirement plan or health plan features. The informational packet should include information on their fiduciary responsibilities and who controls and manages the money that is in the plan.
Provisions have also been amended so that employers have a grievance and appeals process that is accessible to all participants. If a participant feels like their employer breached their duties, they do have the right to sue as long as it can be proven.
How Does the Act Protect an Employee’s Health Plan?
As the United States Department of Labor noticed that employees needed more protection, additional amendments were added to the act to provide health plan benefit protection. In addition to protecting employees’ retirement plans, the act also protects their rights to health insurance if they lose their job or if they have preexisting health conditions. The Consolidated Omnibus Budget Act, more commonly referred to as COBRA, gives employees the right to keep their insurance active for a specific period of time until they can find individual coverage. The Health Insurance Portability and Accountability Act, called HIPAA, protects people who are discriminated in the health insurance industry because of medical conditions. Only health insurance plans that are not maintained by government agencies fall under this protection.
Resource: Which Employee Benefits are Legally Required and Which are Optional?
How Has This Act Helped Millions?
As individuals work and build their retirement it is important that bodies with fiduciary responsibilities are being responsible with their money. Just one or two bad investment moves could wipe out an entire workforce’s retirement money. The act was put in place to guarantee that pensions are protected and that benefit plans truly benefited the employees. By expanding the law to regulate the operation of health insurance benefits, millions have been able to keep insurance when they may have been denied coverage in the past.
Many people are not aware of the protections that are available to them until they need to use them. The Employee Retirement Income Security Act has made a huge impact and benefited Americans in ways they may not even know. As a human resources professional, it is important to learn about the specifics of the provisions of the Employee Retirement Income Security Act (ERISA).