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Employee Retirement Income Security Act (ERISA)

Scales of Justice

ERISA or the Employee Retirement Income Security Act of 1974 is a Federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection to individuals in these plans. ERISA products are regulated by the Federal Government and were established by Congress. The traditional insurance companies and their products are regulated by each of the 50 states through their individual departments of insurance. ERISA sets the standards of conduct for those who manage an employee benefit plan and its assets called fiduciaries. A fiduciary is a person or group that is required to ethically act in the other party’s best interest.

ERISA health benefit plans
are not regulated by state insurance commissions.

An ERISA-covered group health plan is an employment-based plan that provides coverage for medical care, including hospitalization, sickness, prescription drugs, vision, or dental.

Unlike traditional health insurance, state insurance departments do not regulate ERISA health benefit plans. Responsibility for interpretation and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the Pension Benefit Guaranty Corporation.

Plans that are subject to governance under ERISA include:

  • COBRA
  • HRA’s
  • HSA’s
  • FSA’s (Flexible Savings Accounts)
  • 401k Plans
  • Pension Plans
  • Dental Insurance Plans
  • Vision Insurance Plans
  • Cooperatives
  • EAP’s (Employee Assistance Plans)
  • Life Insurance Plans
  • Prepaid Legal Service Plans
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