An ERISA attorney will have the in-depth knowledge you need to ensure you remain compliant.
FREMONT, CA: The Employee Retirement Income Security Act (ERISA) cites specific criteria for benefit plans. Participants may be subject to serious penalties and civil liability if they do not meet these requirements. As part of ERISA, employers are responsible for ensuring their benefit plans are properly funded and administered and providing employees with the information they need to make informed decisions about benefits. Employers can face steep penalties, including fines and civil lawsuits if they fail to comply with ERISA regulations.
ERISA also requires employers to provide employees with certain disclosures, such as information about the type and amount of benefits they are eligible for, while also considering the terms and conditions of the plan. This ensures that employees know their rights and obligations and can make informed decisions about their benefits.
Importance of ERISA: Benefit plans such as group medical insurance, dental and vision plans, health savings accounts, disability and accident plans, and more are governed by this law. Under ERISA, a participant may be required to meet certain requirements to participate in these plans and receive benefits. The law sets minimum participation, vesting, benefit accrual, and funding standards. As a result of ERISA, plan sponsors must provide adequate funding for their plans, and participants are given the right to sue for benefits and breaches of fiduciary duties. It is the responsibility of plan sponsors to provide participants with information about the plan, its features, and its funding. A plan sponsor must be able to provide the DOL with any plan documentation they request. Employees should be provided with plan information regularly.
ERISA and taxes: Employers create qualified and non-qualified plans to benefit their employees. Employers deduct a portion of pretax dollars from an employee's wages for qualified plans, which meet ERISA guidelines and, as such, qualify for additional tax benefits on top of those offered by regular plans. As part of ERISA, plan sponsors must comply with certain guidelines regarding participation, vesting, benefit accruals, funding, and plan information to qualify. As defined by ERISA, non-qualified plans do not qualify for tax-deferral benefits. These are usually offered as extra perks and don't have a set of rules attached.
ERISA requirements: It is possible to separate or combine employer-sponsored benefits in an ERISA-compliant plan document. The SPD of the benefits must be distributed to new participants within 90 days of coverage. Plan benefits, rules for obtaining the benefits in the plan, guidelines for using those benefits, and claims and repeal procedures should all be clearly stated in the plan. The SPD must also include a statement of ERISA rights, plan sponsor, administrator, and trustee information. The SPD for plan participants is often mistakenly used as the Evidence of Coverage or Certificate of Insurance.
Compliance: Employees who allow pretax contributions to their benefit plans without meeting ERISA requirements could face penalties from the U.S. Department of Labor and civil liabilities. Additionally, the IRS will require they pay the unpaid back taxes on the contributions and assess penalties. Combine this potentially large sum of money with the prospect of up to 10 years of jail time if it is found that you willfully violated this law.
ERISA compliance has been amended several times in response to the changing needs of America's workers. Outsourcing ERISA services and specialists is better than navigating this landscape alone. Outsourcing ERISA services and specialists provides access to experienced professionals who understand the complex nuances of the law and how to best handle the various compliance issues that may arise. This can save employers time and money and reduce their exposure to litigation.