The Employee Retirement Income Security Act (ERISA)

Did you know that there is a federal law that establishes a minimum standard for employee health benefits and retirement plans? While an employer is not required to establish a plan, ERISA does require those who establish and administer plans to meet certain standards.

Not all companies offer a benefits plan, but it's important that if they do, to ensure that the benefits of that plan is legitemate. Employers should delegate information regarding the health and retirement plans properly and ahead of time and should follow 5 simple tips to avoid a potential lawsuit, which in a recent case, Cigna v. Amara  was accused of having misleading information on the benefits plan and was sued for the described plan on the summary plan description.

• Summary Plan Descriptions. Draft and distribute SPDs that are brief and easy to read without overt contractual terms or legalese.
• Communications Officer.  Determine the company representative who will have authority over plan administration and communications.
• Regular Reviews. Routinely verify that plan documents are current and that communications are consistent and accurate with the summaries and are compliant with ERISA requirements.
• Transparency in Changes. Employee communications should fully disclose in advance any changes, especially those that may result in adverse circumstances (i.e. a decrease in benefits).
• Non-SPDs.  While an SPD may include both a complete description of the plan's terms (i.e. a Certificate of Coverage) and required ERISA disclosure language, an insurance provider's Master Contract or Certificate of Coverage itself is not considered an SPD. 

More can be read here.