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Employee Retirement Income Security Act (ERISA): A 30,000 Foot View

ERISA: An Overview

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.

Who can bring an ERISA claim?

ERISA specifically identifies the individuals permitted to bring claims for violations of the act’s provisions. The individuals capable of filing claims include a “participant,” “beneficiary,” “fiduciary,” and the Secretary of Labor.

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. A “fiduciary” is an individual who has any discretionary authority or control to manage a covered plan or its assets or any individual who renders investment advice pertaining to a covered plan.

Falling within one of the above categories does not necessarily mean an individual can automatically maintain any cause of action under ERISA, but it is a key step in determining whether a cause of action exists.

What benefits are covered by ERISA?

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 examining 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.

Causes of Action

In addition to limiting the individuals capable of filing suit and the plans covered by ERISA, the act also details a number of causes of action that can be brought to remedy violations.

A participant or beneficiary under a plan subject to ERISA may have a cause of action to, among others:

  • Recover benefits;
  • Clarify rights to future benefits;
  • Sue for breach of a fiduciary duty;
  • Enjoin an act or practice that violates ERISA or the terms of a plan; or
  • Obtain damages for a plan administrator’s refusal to supply requested information.

In addition to recovery based upon the above, an ERISA violation occurs if there is interference with the attainment or exercise of a right provided under the statute.

If you feel your rights under ERISA have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you!