ERISA COmpliance

Offering your employees a group health plan can be as challenging as it is rewarding. As a plan sponsor, you have certain responsibilities as specified by federal law in the Employee Retirement Income Security Act (ERISA), which established standards for welfare and pension plans provided to employees.

TriSure recently held a seminar to clarify the compliance issues surrounding ERISA, we’ll share a few key points from that seminar here:

• The term “welfare” plans includes the following group health benefits:
  
  
  • Medical, surgical and hospital
  • Disability
  • Long–term care
  • Life and accidental disability and death
  • Dental
  • Vision
  
  
• If the benefit of any of these plan types is not provided to participants or their beneficiaries, then it is not an ERISA plan.
  
  
  • Participants include employees, former employees, members and formers members of an employee organization.
  • Participants do not usually include owners of a business, partners in partnership, independent contractors and employees not in an eligible class.
  • Beneficiaries, named by participants, are entitled to benefits such as a life insurance beneficiary. A beneficiary might also be a COBRA–eligible spouse or dependent child.
  
  
• People commonly assume that ERISA only applies to employers with 100–plus workers. This isn’t the case. In fact, a group plan subject to ERISA could consist of only one employee.
  
• Administering a plan or controlling its financial assets makes you a plan fiduciary. Typical fiduciaries include plan administrators, trustees, investment managers, members of a plan’s administrative committee and people who select committee officials.
  
  Fiduciaries must deposit contributions deducted from employees’ paychecks for health plan or COBRA coverage into a trust in a timely manner unless the contributions are used to pay premiums within 90 days of receipt.
  
• ERISA requires that fiduciaries provide the following information about plans to employees:
  
  
  • Summary Plan Description: a plain–language explanation that must identify the rights and responsibilities of participants under the plan
  • Summary of Material Modification: notifies participants and beneficiaries about material changes to their plan
  • Summary Annual Report: outlines financial information about the plan.
  • Other notices, such as COBRA, HIPPA, Newborns’ Act, WHCRA (Women’s Health and Cancer Rights Act), and MHPA (Mental Health Parity Act)

While the U.S Department of Labor Web site discusses ERISA in great detail, we hope these points have given you a better understanding of its requirements.

We often find that ERISA is such a complicated issue for our clients that it’s hard for them to know where to begin. That’s where we can help. For more complete or detailed information, please contact your TriSure benefits representative at 919.469.2473 or refer to the U.S. Department of Labor Web site.