ERISA Regulations for Health Insurance

ERISA, the Employee Retirement Income Security Act established in 1974, sets minimum standards for most health insurance and pension plans. A federal law, ERISA was enacted to protect individuals enrolled in these plans.

Significance

• ERISA ensures plan participants are aware of benefits available to them.

  Group health care plan participants must receive essential information regarding their insurance coverage under ERISA. The insurer provides this essential information, located in the plan document or benefits booklet. It includes plan benefits, plan features, plan exclusions, plan maximums, limitations, funding, appeals and grievance procedures, as well as clear and concise documentation of the plan participants' right to sue for benefits or the lack of benefits provided to them by the insurer.

Features

• Workers and their families may continue health coverage through COBRA after certain events.

  ERISA has had several important amendments. One such amendment, the Consolidated Omnibus Budget Reconciliation Act, or COBRA, provides the option to families to continue health care coverage for up to 18 months after certain events, such as separation from employment by opting to pay for the coverage themselves.

Considerations

• Important health care amendments supplement ERISA.

  The Health Insurance Portability and Accountability Act, or HIPAA, another amendment to ERISA, provides protection for workers and their families who have preexisting conditions. Prior to HIPAA, patients with preexisting conditions generally had to wait from three to 12 months before they could utilize their benefits for diagnoses related to the preexisting conditions.

Benefits

• ERISA established creditable coverage, which is simply coverage from a previous group health plan within the past 63 days of the new coverage. If a patient has creditable coverage, an insurer cannot deny benefits using the preexisting exclusion. Additional important amendments to ERISA include the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act and the Woman's Health and Cancer Rights Act.