Is Your Benefit Plan Subject to ERISA?

Employee benefit plans are often used to attract and retain key employees, as well as providing significant tax advantages to employers. Although benefit plans are not mandated by the government, federal laws do address the administration of certain plans. For example, the Employee Retirement Income Security Act of 1974 and its subsequent amendments impose a number of rules and minimum standards. An employer that offers an employee benefit plan must determine whether it is subject to ERISA regulations.

What type of employer is covered by ERISA?

ERISA applies only to plans offered by private employers. However, plans provided by government agencies, Indian tribal entities, and churches do not have to comply with ERISA.

What type of activities and benefits does ERISA regulate?

Benefit plans offered by an employer typically must meet ERISA standards. Employer-sponsored plans may include some of the following benefits and services:

  • Medical or health care benefits,
  • Insurance policies,
  • Funded vacation benefits,
  • Employer-provided day care centers,
  • Funded scholarship benefits,
  • Certain severance and holiday benefits, and
  • Housing assistance benefits.

Are any plans exempt from ERISA?

Insurance policies or benefit plans purchased privately by individuals typically are not covered.

In addition, certain voluntary benefit plans are eligible for the ERISA safe harbor exemption. Qualified plans may not be held to compliance requirements. However, qualifying for this exemption may be difficult:

  • Employers cannot contribute to or endorse the plan.
  • Employees are not required to participate in the plan.
  • Employers may collect payments for benefits through payroll deductions but cannot be compensated over and above the premium amount.

ERISA is complicated and penalties for noncompliance are severe. Employers should consult with a lawyer who understands ERISA to confirm a plan’s status.

Learn more about benefit plans and ERISA

Benefit plans that are subject to ERISA must meet stringent compliance requirements. Not only must the plan be set up correctly, but ERISA imposes deadlines for the submission of certain forms and reports.

At Hall Benefits Law, we work extensively with employee benefit plans, both before and after plans are established. Please call 678-439-6236 to discuss your concerns with an experienced attorney. Our website contains more information about our firm, a Contact Form, and free resources for your review. Though located in Georgia, we assist clients throughout the United States, from New York to Nebraska to Nevada.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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