Employment Retirement Income Security ACT (ERISA)

In 1974, the government passed the Employee Retirement Income Security Act (ERISA). ERISA is a federal law that fixes minimum standards for a good deal of voluntarily created pension and health plans in private-sector industry. ERISA affords protection for people in these plans.

The main thrust of ERISA is to ensure plans will provide participants all necessary plan information (as well as vital information about plan specifics such as features and funding). In addition, ERISA provides monetary responsibilities for managers and controllers of plan assets. The act requires plans to lay out a grievance and appeals system to make sure plan participants receive their due benefits. Finally, ERISA empowers plan participants with the right to sue for benefits (and breach of duty).

Over the years, a number of amendments to ERISA have been made, which widen protections available to health benefit plan members, and beneficiaries as well. Possibly the most important amendment is the Consolidated Omnibus Budget Reconciliation Act (COBRA) , which provides many employees the right to continue their health coverage for a limited time after certain events, such as after being laid off or otherwise terminated.

The Health Insurance Portability and Accountability Act (HIPAA) is another integral amendment to ERISA. It provides valuable new protections for employed Americans (including their families) who have pre-existing medical conditions. It also applies to those employees who might otherwise suffer discrimination in health coverage because of factors related to an individual's health. Among the other important amendments to ERISA are the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act, and the Women's Health and Cancer Rights Act.