Knowing the Standards: What is Covered by ERISA and What is Not?

Knowing the Standards: What is Covered by ERISA and What is Not?

What is ERISA?

ERISA (Employment Retirement Income Security Act) Law applies to most private employer. It is the law which sets requirements for employer pensions, insurance and benefits. There are some exemptions to this, such as government employers and religious institutions, though ERISA applies for most private employers. If you have any concerns or questions about ERISA, you can contact your local Department of Labor office.

Generally speaking, ERISA will cover the majority of employer sponsored pension plans, benefits and insurance plans. It creates a minimum standard for any benefits (health, disability, etc), pensions and insurance offered by the employer. Please note it doesn’t force an employer to offer these benefits, it simply creates a standard for the benefits which an employer does offer.

It’s probably easier to start with what ERISA doesn’t coveras this should give you a good idea of whether you’re covered or not.

What Isn’t Covered?

There are settings/employers where ERISA doesn’t apply. Some of these are:

  • Employers Insurance (Owners Insurance) – When an employer or owner purchases coverage which covered themselves and not employees, ERISA does not apply.
  • Government Sector – Any pensions, benefits or insurance plans which are issued to government employees are exempt as well. Whether the policies are issued by federal, state or municipal departments doesn’t affect the situation, they’re all exempt.
  • Religious Organizations – As mentioned earlier, alongside the government sector the religious sector is also exempt from ERISA law.
  • Educational and Non-Profit Plans – Anybody working in the educational sector or for non-profits, including museums, galleries and youth organizations would be exempt.
  • Voluntary Plans – Any policy issued by the employer which is voluntary wouldn’t be covered either. These are plans where the employee can choose if they want to participate and would be paid by the employee if they wanted it. Such policies do not benefit from ERISA cover.
  • Independent Plans – When an employee buys an individual policy for themselves, this isn’t covered by ERISA. This is because it’s an extra policy outside of what the employer is required to provide.

What is Covered?

Now you know which types of business are exempt, you should be able to figure out if ERISA law applies to the plans you have in place or not. For those who do have a plan in place, the following list shows what benefits ERISA would generally cover.

  • Medical Benefits – All types of medical care should be covered, from hospital stays to dental and prescription benefits. Even wellness programs, disease management and employee assistance are usually covered.
  • Health & Life Insurance – We’ve listed these together as insurance for any type of illness, injury or death are all covered by ERISA law.
  • Training & Vacation Benefits – Whether you’re away from work for training or vacation, ERISA law will apply to any plan that has associated benefits. This also includes apprenticeship/training plans for those not yet fully employed and general vacation benefits.
  • Severance Pay – Severance/Redundancy benefits are also covered.
  • Child Care – Child care is usually covered when a plan is provided, including day care.

ERISA is a complex law and there are many points to cover. If you have a potential claim or want to understand ERISA better, see Darras Law for more information.

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