ERISA
ERISA is a federal law setting standards for private employer retirement and health plans, including reporting, disclosure, and fiduciary requirements.
us-specific
Category
advanced
Difficulty
7 min read
Read time
2025-01-15
Updated
Definition
Short definition
ERISA is a federal law setting standards for private employer retirement and health plans, including reporting, disclosure, and fiduciary requirements.
Detailed explanation
The Employee Retirement Income Security Act (ERISA) sets minimum standards for most voluntarily established retirement and health plans in private industry to protect plan participants.
ERISA requires plans to provide participants with important plan information, sets minimum standards for participation and vesting, requires fiduciary responsibility, and provides an appeals process.
The law covers most private sector employee benefit plans but does not mandate what benefits employers must provide. Government plans and church plans are generally exempt.
Practical guidance
How it works
Employers establish plans with required documents, follow fiduciary standards, provide required notices, and maintain compliant claims procedures.
Best practices
Maintain current plan documents
Provide all required notices timely
Document fiduciary decisions
Have compliant claims procedures
File Form 5500 annually
Legal context
Legal basis
Employee Retirement Income Security Act of 1974 (29 U.S.C. §1001 et seq.)
Jurisdiction: US Federal
Key provisions
Applies to private sector employee benefit plans
Reporting and disclosure requirements
Fiduciary standards of conduct
Claims and appeals procedures
Plan documentation requirements
Participant protections
Official source
Frequently asked questions
What plans does ERISA cover?
ERISA covers most private-sector employee benefit plans including retirement plans (401k, pension), health insurance, disability, and life insurance. It does not cover government plans, church plans, or individual policies.
What is a fiduciary under ERISA?
A fiduciary is anyone who exercises discretionary control over plan management or assets, or provides investment advice for a fee. Fiduciaries must act solely in participants interests with prudence and care.
Related glossary terms
Health Insurance
Health insurance is a benefit provided by employers that covers private medical treatment costs for employees and sometimes their families.
COBRA
COBRA allows employees and dependents to continue group health coverage after employment ends or other qualifying events, typically for 18-36 months.