Summary of the Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for employee retirement and health plans in the United States. ERISA was enacted in 1974 to protect the interests of employees and their beneficiaries in these plans.

ERISA covers a wide range of employee benefit plans, including pension plans, profit-sharing plans, stock bonus plans, employee stock ownership plans (ESOPs),and welfare benefit plans (such as health insurance plans).

ERISA sets minimum standards for employee retirement plans in the following areas:

Summary of the Employee Retirement Income Security Act (ERISA)

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• Participation: ERISA requires that all employees who meet certain age and service requirements be eligible to participate in their employer's retirement plan.
• Vesting: ERISA requires that employees who have worked for their employer for a certain number of years have a vested interest in their retirement benefits. This means that they cannot lose their benefits if they leave their job before retirement age.
• Funding: ERISA requires employers to make contributions to their retirement plans on a regular basis. The amount of the contributions must be sufficient to ensure that the plan will be able to pay benefits when they are due.
• Fiduciary duties: ERISA imposes fiduciary duties on the people who manage retirement plans. These duties include the duty to act in the best interests of the plan participants and beneficiaries, the duty to manage the plan prudently, and the duty to avoid conflicts of interest.

ERISA also sets minimum standards for employee health plans in the following areas:

• Coverage: ERISA requires that employee health plans provide certain basic benefits, such as hospitalization, doctor visits, and prescription drugs.
• Premiums: ERISA limits the amount that employers can charge employees for health insurance premiums.
• Out-of-pocket costs: ERISA limits the amount that employees can be required to pay for out-of-pocket costs, such as deductibles, copayments, and coinsurance.
• Network adequacy: ERISA requires that employee health plans have adequate networks of providers.

ERISA is enforced by the U.S. Department of Labor (DOL). The DOL has the authority to investigate violations of ERISA and to take enforcement action, such as imposing fines or penalties.

ERISA is a complex law that has a significant impact on employee retirement and health plans. Employees who are covered by ERISA should be familiar with the law's provisions so that they can protect their rights.

Summary of the Employee Retirement Income Security Act (ERISA)

5 out of 5

Language	:	English
File size	:	333 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	100 pages
Lending	:	Enabled

FREE