What Plans Are Governed by ERISA?

ERISA (Employee Retirement Income Security Act of 1974) is federal legislation that “sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans,” according to the Department of Labor.

But which plans qualify? Let’s dive into exactly which plans are included.

What plans are governed by ERISA?

Any private sector employer that offers any of the following benefit plans,  to one or more employees, must comply with ERISA’s formal written plan document and Summary plan Description requirements:

• Health
• Dental
• Vision
• Prescription Drug
• Life Insurance
• AD&D Insurance
• Short Term Disability
• Long Term Disability
• Health care FSA
• Health Reimbursement Arrangements
• Wellness programs (when medical care is provided, such as health risk assessment, on-site nurse clinic, etc.)
• Employee Assistance plans (EAPs), (when medical care is provided)
• Disease-specific coverage such as cancer policies that provide medical benefits
• Voluntary benefits (hospital indemnity, cancer, specified illness, etc. unless covered under ERISA safe harbor

ERISA generally applies to the above common benefits regardless of whether fully or self-funded.

Now that we’ve answered the question “what plans are governed by ERISA?”, it’s also important to note that there are distinct ERISA requirements for private sector employers of different sizes, shown below:

Employers with 1-99 employees:

• All employers who offer Group Welfare Benefits to their employees are required have a formal written ERISA “wrap” plan document and Summary Plan Document (SPD) for each benefit
• Provide a copy of the SPD to all plan participants.
• Provide a Summary of Material Modification (SMM) to plan participants when there is a material modification to the plan itself, or there is a change to the information that is required to be provided in the Summary Plan Description (SPD)
• Provide employees with a variety of ERISA/PPACA related notices concerning their rights and responsibilities
• Provide a Summary Annual Report (SAR) if required to comply with 5500 reporting.
• Provide all ERISA documents stated above upon request by a plan participant or beneficiary or face potential penalty of $110 per day for each day documents are not provided within 30 days of the written request

Employers with 100+ employees must satisfy all requirements above, PLUS:

• Form 5500 Preparation for most employers with 100 or more participants on the first day of the plan year in a Welfare Benefit Plan as defined by ERISA
• Such health and welfare benefit plans may include: health, dental, vision, life insurance, short-term and long-term disability and health FSA plans
• Penalties for non-compliance are up to $2,586 per day for each day a 5500 filing is late, up to an annual maximum of $30,000 per year.
• DOL’s Delinquent 5500 Filer Voluntary Compliance Program (DFVC) allows late-filing administrators to voluntarily bring plan into compliance at reduced penalties