What is an ERISA Plan in the group health plan environment? ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries. ERISA violations can have serious and costly consequences for employers that sponsor welfare benefit plans, either through DOL enforcement actions and penalty assessments or through participant lawsuits.
ERISA applies to virtually all private-sector employers that maintain welfare benefit plans for their employees, regardless of the size of the employer. This includes corporations, partnerships, limited liability companies, sole proprietorships and nonprofit organizations. They exempt two types, those maintained by Governmental Employers and Church Plans.
ERISA generally applies to the following common employee benefits, regardless of whether they are insured or self funded:
- Group Life and AD&D Benefits
- Short and Long Term Disability Benefits
- Disease-specific Coverage (for example, cancer policies)
ALL Group health plans subject to ERISA are required to provide participants with a summary plan description (SPD). An SPD must be written in a manner calculated to be understood by the average plan participant and must be sufficiently comprehensive to inform the participant of his or her rights and obligations under the plan.
For additional information, please feel free to contact us at 214/739-5215.