You may have heard the term ERISA without knowing what it really does. The Employment Retirement Income Security Act provides oversight for health and disability plans provided to employees by their employers. And it has some very specific requirements for how those plans are operated.
ERISA requires those who run plans to give important information about the plans to participants. This information includes the plan rules, financial information and documentation on how the plan is operated and managed.
Participants are entitled to receive a summary plan description (SPD). It provides information on how the plan operates, such as when an employee can join the plan and how claims are filed. A summary of benefits and coverage (SBC) must also be provided, describing benefits and limitations of the plan.
ERISA also requires those who control a plan to act as a fiduciary. This means they must run the plan for the sole benefit of its participants, with the sole purpose of providing benefits and paying the plan’s expenses. They must attempt to minimize the risk of large financial losses, adhere to the terms of the plan and avoid conflicts of interest.
ERISA mandates that plans establish an appeals process so that participants can obtain plan benefits. And in the case of claim denials and breaches of the imposed fiduciary duty, it gives participants the right to sue.
Despite the duties imposed upon plan operators by ERISA, participants can still run into problems collecting the benefits they are owed. Insurance companies may deny benefits, seeking to lower their costs. An experienced professional can help to sort through the issues and protect your rights under ERISA.