Overview

Employee benefits are such things as pensions, life insurance benefits, disability insurance benefits, health benefits and the like. If these benefits are obtained through a "Plan" created by an employer or an employee organization (like a labor union) then, with some exceptions, ERISA applies. This means that federal law--ERISA--governs whether a worker is entitled to the benefits, what rights the worker has to obtain information, and what remedies the worker has if his (or her) claim for benefits is denied.

When ERISA was first passed, it was believed to apply just to funded plans. Funded plans are those where the employer (or employee organization) maintains a fund, with real assets, to pay benefits. However the Supreme Court has since determined that ERISA applied to plans where the benefits are provided through a policy of insurance, or an HMO. That means that life, medical and disability benefits will (generally) be covered by ERISA even where the "Plan" is just a group insurance policy, and the "ERISA fiduciary" is just the insurance company's claims adjuster.

It is difficult to overstate the impact of ERISA application. ERISA essentially sweeps away state laws which would normally govern whether there was a right to benefits. ERISA replaces these state laws with a comprehensive set of Federal regulations. This includes remedies; state laws involving breaches of insurance contract and bad faith do not apply to ERISA plans. Instead, there is a federal remedy, available in the federal courts.




					ERISA OVERVIEW




					ERISA is short for the "Employee Retirement Income Security Act of 1974." It is a federal law which was designed to federalize and unify the field of employee benefits.



				Employee benefits are such things as pensions, life insurance benefits, disability insurance benefits, health benefits and the like. If these benefits are obtained through a "Plan" created by an employer or an employee organization (like a labor union) then, with some exceptions, ERISA applies. This means that federal law--ERISA--governs whether a worker is entitled to the benefits, what rights the worker has to obtain information, and what remedies the worker has if his (or her) claim for benefits is denied. When ERISA was first passed, it was believed to apply just to funded plans. Funded plans are those where the employer (or employee organization) maintains a fund, with real assets, to pay benefits. However the Supreme Court has since determined that ERISA applied to plans where the benefits are provided through a policy of insurance, or an HMO. That means that life, medical and disability benefits will (generally) be covered by ERISA even where the "Plan" is just a group insurance policy, and the "ERISA fiduciary" is just the insurance company's claims adjuster. It is difficult to overstate the impact of ERISA application. ERISA essentially sweeps away state laws which would normally govern whether there was a right to benefits. ERISA replaces these state laws with a comprehensive set of Federal regulations. This includes remedies; state laws involving breaches of insurance contract and bad faith do not apply to ERISA plans. Instead, there is a federal remedy, available in the federal courts.