Employees are the most important part of any business. For
this reason, the government crafts and updates many policies and laws that
ensure employee rights are not violated. When it comes to retirement and health
benefits, employers must follow the Employee Retirement Income Security Act of
1974 (ERISA) guidelines. If you would like to learn more about ERISA, keep
reading.
What Is ERISA?
ERISA is a federal law to protect employee benefit plans.
For the most part, it protects against the mismanagement and abuse of
retirement funds. This ensures the people handling the money are held to high
standards and must act in the best interest of you and your finances.
In addition, ERISA also covers a lot of non-retirement,
employee health plans. These include health maintenance organizations, health
reimbursement accounts, flexible spending accounts, disability insurance, and
life insurance. To stay compliant with ERISA guidelines, companies are required
to provide reports to the government on what they are doing and how they are
doing.
What Does ERISA Do?
ERISA does a lot to protect you. First, it requires that
employers must provide all participants with important information about their
benefit plan, including features and funding. In addition, it sets minimum
standards for companies to follow, such as requiring years of experience in the
field before handling a plan.
ERISA also puts more accountability on plan fiduciaries, which
includes anyone who offers investment advice. These rules require plan
fiduciaries to follow the principles of conduct. If they do breach the
principles of conduct, ERISA gives you the right to sue for financial
compensation.
What Are Your Rights Under ERISA?
ERISA also provides a lot of rights to help you. First, you
have the right to receive information about the plan and benefits. Under ERISA,
you are legally allowed to access all documents governing the plan free of
charge at the plan administrator's office (usually your HR department). You can
also request copies for a fee, and the company must provide a summary of the
plan's annual report.
In addition, ERISA protects your right regarding group
health coverage. Without ERISA, if you lose your job, you immediately lose your
health benefits. ERISA, however, requires employers to provide COBRA benefits.
With COBRA, you still get the same group coverage at the group price. However,
since you are no longer employed, the employer won't pay part of the benefits.
So you keep your benefits, but the full cost of the premium falls on you.
What Do You Do If Your ERISA Rights Get Violated?
Despite the laws, some companies may purposefully or
accidentally violate ERISA regulations. Some of the most common violations
include wrongful denial of benefits, breach of fiduciary duty, and interference
with the rights of employees. If this happens, the employer may face civil or
criminal penalties.
If you believe your rights have been violated, you should
first file a complaint against the person or business that violated your
rights. You may also want to take action via the Employee Benefits Security
Administration, which enforces laws related to ERISA.
If the violations are considered civil, the offending
company may have to pay fines and change procedures that violate ERISA. In
addition, they may be required to pay you for damages. If the violation is
considered criminal, the fee could be as high as $100,000, and the person who
violated ERISA rights may face up to 10 years in jail. If the defendant is a
company instead of an individual, the fines can reach as high as $500,000.
ERISA protects you in many ways, and it puts strict
standards on fiduciaries. Despite this, some companies make mistakes and
violate your rights or break the law. If you think your ERISA rights have been
violated, or if you want to learn more, contact us
at the Law Offices
of James B Gillespie, Jr., PLLC today.
