What Types of Disability Plans Are Subject to ERISA?

Sickness, defined as a serious medical condition or conditions that can be proven as the cause for an employee's absence, and accidents, including accidental death and dismemberment, as well as disability income and sick pay plans are all considered disability plans subject to the Employee Retirement Income Security Act (ERISA).

Exclusions

• Some plans are specifically excluded from ERISA.

  A plan fully paid for by the employee remains subject to ERISA only, if originally the plan was maintained by the employer. Employee benefit plans that are sponsored by government entities, churches as well as some self-insured, self-funded and worker's compensation plans, generally, do not fall under ERISA regulations.

Rules

• Plan documents must be written in plain language that each employee will understand.

  Disability benefits, whether they are short term or long term, must be documented in the plan document for all enrolled employees. How to file claims, claim filing period, determination period, appeal process and an administrator to contact for questions must also be documented in plain language that the subscriber can understand, per ERISA guidelines.

Penalties

• Penalties and interest may be awarded to an employee of an employer who does not provide documentation in plain language detailing the disability benefits so that the employee may understand his or her benefits. Complaints may be filed electronically through the U.S. Department of Labor website, under EBSA, the governing entity for ERISA, at http://www.askebsa.dol.gov or by calling its toll-free number, 866-444-3272.