Does ERISA Apply To Me?
ERISA, or the Employee Retirement Income Security Act, is a federal law that is aimed at protecting working people. Employees rely on health insurance, retirement plans, and other benefits that their employers have promised them. ERISA sets forth standards about how employee benefits should be managed and creates an appeal process if their benefits are not managed properly. The act gives those who are participating in it an avenue to sue their employers if they behave improperly with their promised benefits and grants access to certain federal benefits. The question, therefore, is whether you have access to these benefits and protections.
If you have a pension plan provided by your employer, you are automatically subject to ERISA. The law also applies to other types of employee benefit plans, such as:
- Health and dental insurance plans
- Unemployment benefits
- Health savings accounts
- Flexible spending accounts
- Disability insurance
- Prescription drug plans
- Housing assistance plans
- Vision plans
- Pre-paid legal services plans
When Does ERISA Not Apply?
While there are many situations where ERISA will apply, there are also four cases where it will not. These four are government employers and entities, unfunded excess benefit plans, plans maintained outside the United States, and plans established by religious organizations.
When ERISA Doesn’t Apply – Government Employers And Entities
Initially, ERISA was enacted in order to prevent the systematic abuse of private employees’ pensions. However, it was eventually decided that state and local governments should be the ones to decide the most effective ways of protecting their employees. Thus, benefit plans created under a collective bargaining agreement between a union and a government entity are not covered by ERISA.
Because ERISA regulations differ across the country, you shouldn’t take someone who lives in a different state’s experience as an indicator of what yours will be. It is a good idea to check your state laws when it comes to ERISA and its exemptions of specific government plans. For example, some states may rule that the following are not subject to ERISA:
- Public school healthcare plans
- State-established optional retirement plans for college or university workers
- Firefighters pension funds
- Claims by city employees against their health insurance companies
When ERISA Doesn’t Apply – Unfunded Excess Benefit Plans
Unfunded excess benefit plans are plans that are designed for certain employees with more than the amount that can be saved due to limits that are baked into most qualified plans. These plans are generally best suited to high earners. Some examples of an unfunded excess benefit plan could include
- Stock-based incentive plans
- Deferred compensation plans
- Recognition plans
- Retention plans.
These are not covered by ERISA, in part because they have the ability to increase or decrease in value over time.
When ERISA Doesn’t Apply – Plans Maintained Outside Of The United States
Plans that are maintained outside of the United States for the main benefit of a non-resident of the U.S. are not covered by ERISA. This is due to the fact that ERISA was created to apply exclusively to American employees. Because ERISA is governed by a division of the Department of Labor as well as the Treasury Department, it can only apply to things or people that those departments have power over, which does not include those outside the United States.
When ERISA Doesn’t Apply – Plans Established By Religious Organizations
If you have an employee benefit plan that was established by your church, temple, mosque, or any other religious establishment, it will not be governed by ERISA. This also applies to palms that are maintained for the sole purpose of complying with disability, unemployment, or workers’ compensation laws. There are also certain voluntary group insurance plans where, if the employer does not contribute to the plan, ERISA will not apply.
How Can An Insurance Attorney Help Me?
If you have questions about whether ERISA applies to you, or any other burning life insurance questions, McKennon law group is offering free consultations.
At McKennon, we have a dedicated and experienced team of lawyers who will fight for you to get the consideration and compensation you deserve from your insurance.
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