What is ERISA?The Employee Retirement Security Act of 1974 (ERISA) is a federal law that governs many employee benefits. Generally, ERISA governs all pension plans and insurance plans that are provided by private employers. This excludes pension plans and insurance plans provided to employees of a local, state, or federal government office, or employees of a church or religious organization. ERISA is important because it preempts any State government regulation of the pension and insurance plans that it covers. The law firm of Harris & Engler helps people in Ohio who have been denied insurance claims that are governed by ERISA.
Employer Provided Insurance under ERISAEmployers often provide insurance as part of an employee benefit package. Insurance is generally considered to be "employer provided" if it is paid for by the employer, as part of an employee welfare benefit plan. If insurance is provided as part of an employee welfare benefit plan, the insurance claim process and what to do if your claim has been denied are governed by the Employee Retirement Security Act of 1974 (ERISA).
Why Does ERISA Matter?ERISA is a federal law that was intended to protect workers' rights to employer provided benefits.
ERISA was enacted during a time when the operation of pension plans was largely corrupt. Pension plan administrators were supposed to be fiduciaries of the money that was set aside and invested for workers' pension plans. But sometimes pension plan money would go missing, or the administrators would get kickbacks for making investments that weren't necessarily in the best interests of the pensioners. So the federal government enacted ERISA to safeguard the processes and procedures of pension administration. While ERISA was enacted to be very protective of workers in the pension plan arena, the United States Supreme Court has interpreted ERISA in a way that is very protective of insurance companies when it comes to disability insurance and life insurance plans provided by employers.
The drafters of the Employee Retirement Security Act of 1974 (ERISA) wanted to protect pension plans for workers, but ERISA is more broadly encompassing than just pension plans. ERISA governs all benefits provided as part of an employee welfare benefit plan, such as health and disability insurance. The drafters of ERISA did not want to make the law so protective of workers rights with respect to employee benefits that employers stop providing the benefits because of the regulatory hassle. So ERISA was written in a way that benefits insurance companies when it comes to disability and life insurance benefits.