Employee Welfare Benefit Plan & ERISA

The healthcare and insurance industries are subject to a range of regulations designed to protect consumers from unfair practices. Within the workplace, ERISA (Employee Retirement Income Security Act) laws serve as a guideline for employers who offer group health insurance coverage. Employee welfare benefit plans are defined as the group health coverage provided through an employer-sponsored health insurance plan.

Employee Benefits Security Administration

• Employee welfare benefit plans are regulated by the Employee Benefits Security Administration (EBSA), a subdivision of the U. S. Department of Treasury. As the regulating agency, the Employee Benefits branch administers any laws, guidelines or procedures that affect employer-sponsored group health plans. Ensuring that employees receive the benefits promised through their employers is one of the Employee Benefits Security Administration's primary objectives. In effect, the EBSA monitors and regulates employer practices to ensure that they comply with ERISA guidelines.

Employee Retirement Income Security Act

• The Employee Retirement Income Security Act of 1974 --- also known as ERISA --- is a federal law that provides employee rights and protections in cases where an employer offers group health insurance coverage. As group health coverage makes up only one aspect of an employee welfare benefit plans, ERISA law doesn't apply for employer-sponsored benefits, such as workers' compensation, disability insurance and unemployment benefits. ERISA guidelines list the minimum standards required for an employer-sponsored health. Under ERISA, employees have the right to sue an employer when employers violate the conditions set forth in an employee's group health plan coverage.

Plan Management Guidelines

• Under ERISA law, employer-sponsored health plans must follow certain guidelines in terms of plan administration and employee notifications. Employers are required to make plan information, such as features or coverage available and funding providers, readily accessible to covered employees. ERISA law also dictates how administrators handle plan monies and sets the guidelines for documentation and records management procedures. Employers are also required to have a grievance and appeals process in place, which provides employees a way to dispute claim decisions made by plan administrators.

ERISA Amendments

• Since the inception of ERISA in 1974, other federal laws affecting employee welfare benefit plans have been developed as amendments to ERISA. The Consolidated Omnibus Budget Reconciliation Act or COBRA amendment provides extended health insurance coverage to employees in cases of layoff or termination from a job. This coverage applies for the families of employees as well and is offered for a limited period of time. The Health Insurance Portability and Accountability Act, or HIPAA is another ERISA amendment that protects employee health coverage in cases where a preexisting medical condition might exclude a person from employer coverage.