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What Is Considered An ERISA Plan?

March 22, 2021, by New City Insurance

office view of a company who learned what is considered an ERISA planThe Employee Retirement Income Security Act (ERISA) of 1974 is a U.S. federal tax and labor law established to protect the interests of employee benefit plan participants and their beneficiaries. ERISA plans account for a large U.S. market of employer-sponsored health plans that are regulated under the Act.

What Is ERISA?

ERISA sets standards for health, retirement and other welfare benefit plans, including disability insurance, life insurance and apprenticeship plans. The Act establishes standards of conduct for fiduciaries and includes enforcement provisions to ensure that plan funds are protected and that all qualifying participants receive their entitled benefits.

ERISA was created to prevent the abuse or mismanagement of employee retirement savings. It holds those responsible for these savings to a high standard and enforces rules that ensure that they act in the best interest of the plan participants. ERISA is administered and enforced by the Pension Benefit Guaranty Corporation, the Internal Revenue Service and the Labor Department’s Employee Benefits Security Administration.

What Does ERISA Regulate?

Under ERISA, employers are not required to provide employees with a benefits plan. However, businesses that offer such plans must ensure that they are managed in compliance with the provisions mandated under ERISA. These provisions include:

  • Conduct — ERISA regulates the conduct for managed care, such as HMOs, and other fiduciaries.
  • Disclosures — Businesses are responsible for providing plan participants with certain disclosures, such as a written plan summary that lists the benefits offered, the plan’s limitations, the rules for acquiring the benefits and other guidelines.
  • Reporting — ERISA required detailed reporting to the federal government.
  • Procedural Safeguards — Businesses must develop a written policy that outlines how to file claims, along with the written claims appeal process if a claim is denied.
  • Best Interest Protection — ERISA prohibits discriminatory practices and ensures that plan funds are delivered in the plan participants best interest.

What is the ERISA Annual Report Requirement?

paper and pencil explaining what is considered an ERISA planPlan administrators of ERISA plans are required to file an annual report with the Department of Labor unless an exemption applies. IRS Form 5500 is used to provide the DOL with specified plan information, including details about a 401(k) plan’s financial conditions, operations and investments. All retirement plans, including profit-sharing plans, must have a completed Form 5500 each year. Also, for benefits plans such as health, dental, and vision, a Form 5500 is required if either at least 100 participants were enrolled in the plan at the beginning of the plan year or if the plan is self-funded.

ERISA Minimum Requirements On Employer-Sponsored Health Plans

There are more than 2.2 million employer-sponsored health plans covered by ERISA in the U.S., according to the DOL. Approximately 40 percent are covered under a fully-insured ERISA plan, while the remaining 60 percent are covered by a self-funded ERISA plan. Businesses that offer ERISA plans must meet the minimum requirements imposed by ERISA on employer-sponsored health plans.

Plan Document Requirements

ERISA plan document requirements refer to a rule that ERISA health plans must be administered with a written plan document that includes information such as the names of fiduciaries, how benefits are paid, plan administration and operation, benefits appeals and procedures for processing benefits claims. These plan documents must comply with nondiscrimination rules, certificates of coverage, DOL regulations and special enrollment rights. The plan document must also specify how the plan will protect the healthcare privacy of plan participants and their beneficiaries.

Summary Plan Description Requirements

Under ERISA, plan administrators are required to provide plan participants and beneficiaries with a written summary plan description (SPD) in terms that are easy to understand. The SPD should accurately and clearly describe all health plan benefits, details about the provider networks, and cost-sharing provisions like deductibles, premiums, copayments, coinsurance and other expenses that the plan participant or beneficiary will be responsible for paying.

Reporting And Fiduciary Requirements

Plan administrators are also responsible for certain ERISA reporting and fiduciary requirements. Each year, ERISA requires the reporting of financial and other relevant information to plan participants and the Department of Labor.

sunset view of an office that learned what is considered an ERISA planFiduciary requirements refer to the set of rules and standards that ERISA sets to govern the conduct of any individuals who exercise control or authority over the management of an employee benefits plan. Fiduciaries must also add prudently and diversify the plan’s investments in an attempt to minimize the risk of large losses. They should avoid any conflicts of interest.

Talk with New City Insurance About What Is Considered An ERISA Plan

Employers who contribute to a retirement or health plan are subject to the rules of ERISA. An employer-sponsored health plan that takes salary deductions from employees or contributions by an employer is considered an ERISA-qualified plan.

However, ERISA does not generally cover group health plans that are established or maintained by religious institutions or government organizations. In addition, individual retirement plans are not generally covered by ERISA, although some exceptions do exist. To learn more about what is considered an ERISA plan or to speak with an experienced agent about acquiring an ERISA plan, reach out to the insurance experts at New City Insurance today.

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Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
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Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
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21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
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Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
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I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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