Navigating the many laws regarding disability insurance can be daunting. There are many complicated regulations to keep track of, which adds an extra layer of difficulty when you are also struggling with a disability.
One important law that is confusing for many disability claimants is The Employee Retirement Income Security Act (ERISA). Created in 1974, the act imposes standards and regulations on retirement, health and welfare benefit plans. When employers offer welfare benefit plans to their employees, ERISA sets certain standards that the employer must meet.
What does ERISA regulate?
While ERISA’s standards are meant to protect both employers and employees, it is employers’ responsibility to meet the law’s standards. The standards and regulations are meant to ensure fairness and accountability for employees who receive benefit plans. ERISA’s regulations include:
One of ERISA’s most important regulations is that of conduct. The law sets strict rules for the standard of managed care—for example, HMOs—and fiduciaries. The conduct regulations are meant to set a high standard of care for employees whose benefit plans include it.
What’s more, there are certain standards for reporting and accountability. Under ERISA, employers and plan fiduciaries must provide detailed reports to the federal government for the sake of transparency and accountability.
Employees who participate in ERISA-regulated plans are owed certain disclosures. The plan summary must provide a comprehensive list of the plan’s benefits, rules and limitations. It should also provide guidelines for obtaining benefits such as advance referrals.
Every plan under ERISA should have written policies establishing standard procedures for clients to follow. For example, every plan should have a policy addressing how to file claims, how to file a written appeal when a claim is denied.
5. Financial protection
Finally, ERISA acts as financial protection for beneficiaries. It ensures that the funds from a plan are distributed fairly and in full, in the plan member’s best interests. ERISA’s financial protections also prevent discrimination against individuals from obtaining their plan benefits.