Employee Retirement Income Security Act

Working men and women form the backbone of America’s economy.  After World War II ended, large companies were pressured by federal governmental policy and collective bargaining and began offering workers retirement, pension, and healthcare benefits.  In 1974 in response to some companies’ practices that harmed workers, Congress enacted the Employee Retirement Income Security Act (ERISA) and set standards for establishing and regulating private-sector pensions and benefits.  Congress imposed fiduciary duties on pension managers. Fiduciary duties are the highest legal duties that the law imposes.

Since that time, two major developments, which are not in workers’ interest, have occurred.  First, fewer companies are providing retirement and pension benefits for their workers and, instead, tell their workers to fund their own retirements directly from their earnings through Individual Retirement Accounts (IRAs) and other similar plans.  Unfortunately, realistically, few workers can adequately fund their retirements.  Second, the United States Supreme Court has interpreted ERISA numerous times over the last generation, usually to favor companies and their plans, not workers.  Critics complain that the High Court has turned this special fiduciary duty and relationship to protect workers into a law that protects companies and plans at workers’ expense.  Supporters contend that the Court’s decisions ensure the plans’ ability to provide benefits over time.

The Employee Retirement Income Security Act of 1974 established minimum requirements for private-sector worker pensions and healthcare plans and offers some protections to the individuals who use said healthcare plans. Under ERISA, plans must report important information about their nature, features, and funding; outline their managers’ legal duties and responsibilities; and offer grievance and appeals processes for workers and retirees.

In reality, the plans are often administered by insurance companies. Though the law’s purpose is to protect workers, the plans, in fact, impose strict deadlines (which the courts typically uphold) for filing, and too often the workers, or plan participants, are not represented by lawyers and do not have the ability to meet the strict requirements for filing claims.  Though federal courts typically review the plans’ decision to deny or limit benefits, the review is limited.  In one decision, the Supreme Court practically admitted that its decisions were confusing and, I add, in the writer’s opinion, unnecessarily convoluted.

The 1974 Act has been amended many times over the years and, at times, added benefits for workers.  The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allows workers and their families to retain their healthcare plans for a limited time after workers lose their job.  The worker, however, must pay the entire amount of the premium, a reality that often makes the benefit unusable for workers.  The Health Insurance Portability and Accountability Act (HIPAA) of 1996 protects workers and their families with preexisting medical needs from certain discrimination, which could be triggered by and based on factors of one’s individual’s health, but with limits. The Newborns’ and Mothers’ Health Protection Act (NMHPA) of 1996 dictates that plans, which include maternity leave and benefits, also must include pay for the mother’s post-birth hospital bills for  48 hours, but the 48-hour period is not enough time to cover the many bills that new mothers face.  The Mental Health Parity Act (MHPA) of 2008 ensures that group plans with mental health components are not more restrictive or limited in nature than the non-mental-health components, but this Act also has limits in its effectiveness.  The Women’s Health and Cancer Rights Act (WHCRA) of 1998 offers individuals, whose plans include mastectomy coverage, added protections in order to ensure that post- mastectomy procedures are acceptable to both patients and physicians.

Each change in the law was in response to companies’ actions that negatively affected American workers. Nevertheless, the changes have limits, and too often the laws are riddled with loopholes.

ERISA and other laws do not cover ALL areas of healthcare, welfare, and insurance.  It excludes coverage from group plans for government entities, churches, workers’ compensation, unemployment, or disabilities, and plans made and maintained outside of America.

These laws are complex.  If you are applying for disability or other benefits under a plan covered by ERISA, talk to a lawyer.  If your rights, as outlined in ERISA, are ignored or violated, you may have legal remedies available to you. Do not delay.  If you have questions, talk to a lawyer. For more information and to have questions answered, contact Nashville Attorney Perry A. Craft.