Eighty percent of employees say they’d choose additional benefits over a pay raise – and employers have taken note.
In the past few years, 98% of leaders added or expanded at least one employee benefit to equip people with the support and flexibility they need. As a result, organizations saw increased productivity and retention, and they created a culture that attracted top talent.
However, compliance with state and federal regulations regarding these benefits proved daunting for many business owners. One such federal regulation is the Employee Retirement Income Security Act of 1974 (ERISA), which sets standards and regulations for private sector employee benefit plans, including retirement plans, such as 401(k)s and health insurance plans.
Does Your Plan Satisfy ERISA Requirements?
What is ERISA?
ERISA is a comprehensive federal law that regulates pension, health and welfare, and other employee benefits. It was primarily designed to protect employees’ interests in employer-sponsored benefit plans.
In a nutshell, ERISA protects the interests of participants and beneficiaries by:
- Requiring the disclosure and reporting of financial and other information
- Establishing standards of conduct and responsibility for fiduciaries
- Providing access to federal courts
List of ERISA Plans
Plans that fall under ERISA include defined benefits and defined contributions plans, 401 plans(k), 413b plans, EPSOPs, or profit-sharing plans. ERISA also covers private health plans such as health maintenance organizations (HMOs) and Flexible Spending Accounts (FSAs).
Pension or health plans provided by federal, state, or local governments, Indian Tribal entities, and churches are not required to follow ERISA.
Please note that the following is just a general list of benefits subject to ERISA and is not meant to be all-encompassing.
Medical, Surgical, or Hospital Care Benefits
ERISA covers general benefits that aid employees in the event of sickness, accident, disability, death, or unemployment.
These benefits include:
- Major Medical
- Dental
- Vision
- Prescription Drug Benefits
- Health Flexible Spending Accounts (Health FSAs)
- Health Reimbursement Arrangements (HRAs)
- Specific Employee Assistance Programs (EAPs)
- Wellness Programs
- Disease Management Programs
- Cancer Policies
- Insured disability income plans
- Sick pay plans
- Accidental death and dismemberment
- Life insurance
ERISA-Covered Retirement Plans
ERISA covers various types of retirement benefit plans offered by employers in the private sector.
The main types of retirement benefits covered by ERISA are:
- Defined benefits plans
- Defined contribution plans
- Profit-sharing plans
- Employee stock ownership plans (ESOPs)
- Cash balance plans
Funded Vacation Benefits
ERISA can cover vacation benefits funded by employers for their employees. These benefits may include accrued paid time off or vacation days that employees can use for personal leisure or relaxation. Employers may establish policies regarding the accrual, use, and payment of vacation benefits, subject to ERISA’s reporting and disclosure requirements.
Funded Apprenticeship Benefits
ERISA can cover apprenticeship benefits offered by employers to individuals participating in formal apprenticeship programs. These benefits may include contributions to apprentices’ retirement accounts, health insurance coverage, or other welfare benefits.
Care Assistance Program
ERISA can cover care assistance programs employers provide to help employees manage caregiving responsibilities for dependents, such as children, elderly parents, or disabled family members. These programs may include employer-sponsored daycare services, eldercare assistance, or referral services for finding caregivers.
Higher Education Benefits
ERISA can cover higher education benefits employers offer to help employees pursue further education or training to enhance their skills and qualifications. These benefits may include tuition reimbursement programs, scholarships, or educational assistance loans.
Holiday Benefits
ERISA can cover holiday benefits provided by employers to employees for designated holidays. These benefits may include paid time off, premium pay for holiday work, or additional holiday-related perks or incentives. Employers must establish policies regarding holiday benefits that comply with ERISA’s requirements for plan administration, reporting, and disclosure to ensure that employees receive accurate information about holiday entitlements and their rights under the plan.
Feel Confident About Your ERISA Compliance
ERISA clearly covers a wide range of employee benefits beyond traditional medical and retirement plans. Ultimately, you must prioritize ERISA compliance to protect the interests of your employees, maintain the integrity of your organization’s benefit plans, and avoid costly legal and financial repercussions. Regular monitoring, diligent administration, and proactive risk management are key to achieving and maintaining compliance with ERISA.