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Employee Retirement Income Security Act

The toughest of insurance laws.

What is ERISA?

The Employee Retirement Income Security Act (ERISA). ERISA is a federal law that regulates employee benefits, such as company-sponsored insurance and retirement plans.

ERISA has been amended several times, and some of the laws we discuss later in this guide such as COBRA and HIPAA are just amendments to ERISA.

ERISA was established to protect employees and their family members who participate in company sponsored insurance and retirement plans. The U.S. Department of Labor conducts an average of 3,000 audits of these private-employer benefit plans per year. They estimate that around 70% of audits find some type of ERISA violation.1

But to give you some peace of mind, the majority of errors have to do with the management of 401(k) plans, such as failing to get the employee’s contribution into the 401(k) plan in a timely manner or failing to include certain pay categories (such as bonuses and severance payments) in eligible compensation for 401(k) contributions.

However, some of these errors deal with health insurance plan sponsors failing to maintain the required plan documents (such as the SPD) or failing to follow all of the guidelines in their plan documents (such as adhering to the plan’s employee eligibility
requirements).

1Department of Labor
Summary of Major Provisions

ERISA sets minimum standards for companies that sponsor health plans. The intent of these standards is to protect the employee plan participants and to offer them transparency regarding the plan.

So basically, ERISA requires that the plan sponsor (remember that’s you) provide participants with certain information and disclosures regarding the plan. It also requires that the plan sponsor meet certain codes of conduct (including non-discrimination in the administration of the plan).

Finally, ERISA requires that some plan sponsors report on the plan to the federal government.

Required ERISA filings

Form 5500

Filing Name: Form 5500
Who Must File: Plan sponsor of any fully-funded health plan covering 100 or more employees at the beginning of the plan year & plan sponsors of all self-insured health plans
Filing Method: Electronic filing required through Department of Labor’s EFAST2 system
Filing Frequency: Annual
Due Date: The last day of the seventh month after the plan year ends (July 31 for a calendar-year plan)

CREDITABLE COVERAGE DISCLOSURE TO CMS

Filing Name: Creditable Coverage Disclosure


Who Must File: Plan sponsor of any health plan offering a prescription coverage benefit    
Filing Method: Electronic filing required at CMS.gov  
Filing Frequency: Annual
Due Date: 60 Days after the beginning date of the plan year; 30 days after the termination of the prescription drug plan; and 30 days after a change in the plan’s creditable vs. non-creditable status
143 million
number of U.S. workers and their dependents covered by an ERISA plan
$8.7 trillion
amount of assets in ERISA plans
3,000
average number of ERISA plan audits the U.S. Dept. of Labor conducts annually
70%
of audits include some sort of violation

More questions?

Speak with a Licensed Insurance Agent.

(214)238-4414, Monday – Friday 8am – 5pm CST

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