The Employee Retirement Income Security Act of 1974 (“ERISA”) is a federal law that protects an individual’s rights to benefits under employee benefit plans. Passed in 1974, ERISA has been amended to expand the protections available to covered individuals. Notable amendments include, but are not limited to, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Health Insurance Portability and Accountability Act (“HIPAA”), and the Affordable Care Act.
However, as COVID-19, otherwise known as the novel coronavirus, swept through the United States, impacting employers and employees alike, ERISA has not escaped unscathed. In addition to the foregoing amendments, President Donald Trump’s declaration of a national emergency and signing of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) has resulted in the temporary amendment of various aspects of ERISA. In accordance with these actions, on April 28, 2020, the United States Department of Labor (“DOL”) issued “COVID-19 FAQs for Participants and Beneficiaries” and on May 4, 2020, issued a notification regarding relief and extension of timeframes under ERISA.
ERISA Overview: Participants and Beneficiaries
ERISA specifically identifies the individuals permitted to bring claims for violations of the Act’s provisions and, therefore, have enforceable rights under ERISA. The individuals capable of filing claims include but are not limited to a “participant” and/or a “beneficiary.” A “participant” is a current or former employee subject to or covered by an employee benefit plan that is provided by an employer or employee organization. A “beneficiary” is any individual who has been designated by a participant or the terms of an employee benefit plan, as entitled to a benefit under that plan.
ERISA Overview: Benefits
ERISA applies to “employee benefit plans” established or maintained by an employer or employee organization. The two categories of employee benefit plans are “welfare benefit plans” and “pension plans.” Generally, if an arrangement meets three requirements, it is a plan subject to ERISA. The three requirements are that it is (1) a plan, fund, or program; (2) it is established or maintained; and (3) such is done by an employer or employee organization.
However, further examination of the two categories of employee benefit plans provides additional detail. A “welfare benefit plan” is a plan that provides certain benefits pertaining, but not limited, to medical, health (i.e. sickness, accident, disability, death), unemployment, and vacation benefits that is established or maintained by an employer or employee organization. Such benefits can be provided through the purchase of insurance or otherwise by or through the employer. A “pension plan” provides retirement income to employees or results in the deferral of income to cover periods of time, such as termination of employment.
COVID-19 Impact on ERISA Health Benefits
On May 4, 2020, the DOL issued a notification regarding relief and extension of timeframes under ERISA. Pursuant to this notice, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA must disregard the period from March 1, 2020, until sixty (60) days after the end of the National Emergency, as declared by President Donald Trump on March 13, 2020, or after such other date announced by the DOL. The DOL deemed this time period the “Outbreak Period.”
The Outbreak Period applies to plan participants, beneficiaries, qualified beneficiaries, and claimants in the following circumstances: (i) the period for requesting special enrollment; (ii) the election period for COBRA continuation coverage; (iii) the date for making COBRA premium payments; (iv) the date for individuals to notify the plan of a qualifying event or determination of disability; (v) the date within which individuals may file a benefit claim under the plan’s claim procedure(s); (vi) the date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure(s); (vii) the date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and (viii) the date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete. However, the Outbreak Period will not apply to the date for providing a COBRA election notice under group health plans.
If you feel your rights under ERISA or the CARES Act have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Michel | King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you!