After the Employee Retirement Income Security Act of 1974 (ERISA) was enacted, federal law began regulating retirement plans and insurance for private employers in the United States.
The Act established legal guidelines for all private pension plans, investment practices, and the administration of these programs. Minimum standards regarding life insurance, disability, welfare, and health plans were established to protect individuals under these plans.
What Is ERISA Litigation?
ERISA was originally signed into law by President Gerald Ford. The Act initially came after issues related to pension plans, especially after the Studebaker Motor Company filed for bankruptcy and left company workers without funds and remedies for their lost pension plans.
For the last 35 years, ERISA has gone through more than forty amendments, with most of the changes occurring in the pension portion of the Act.
Modifications in 1985 and 1996 were the most notable and included the Consolidated Omnibus Budget Reconciliation Act and the Health Insurance Portability and Accountability Act.
The Department of Labor (DOL) oversees the Act; however, the law only applies to private employers or those not affiliated with the government. If a worker has a denied appeal and he or she has followed all guidelines established by ERISA, the next step could be to file a lawsuit against the employer.
ERISA allows a judge to review the case for possible abuse of discretion. The judge can examine and overturn the decision, but the judge’s authority is limited.
The Complexities of the ERISA Rules
ERISA is a very complex Act, and it is continuously changing to meet the demands of today’s worker. Regulations vary, and therefore, this area of the law is often too complicated for a layperson.
ERISA has a manual for employees and enforcement-related guidelines, but it is not designed to help you interpret the Act. For an employer to be guilty of civil violations of ERISA, the following elements must be present:
- Failure to Execute an Employee-Favored Plan – The company fails to operate the benefit plan with prudence and in the interest of the employees.
- Asset Usage and Benefits – Under ERISA, employers have the right to use benefits for certain parties, but cannot solely do so to help the plan sponsor, parties related to the individuals, or the program’s administrator.
- Valuing Assets – Employers cannot improperly value assets or ignore current fair market values. Also, assets cannot be held in a trust.
- Failure to Monitor – Employers must monitor and carefully select all service providers related to their plan. Inability to do so is a violation of ERISA.
- Adverse Actions Against Employees – A company cannot take any actions against an employee for exercising their rights under the plan, including terminating, fines, or discriminating against workers.
When Is an ERISA Claim Necessary?
There are two types of claims filed under ERISA: a benefit claim and a breach of fiduciary duty claim.
- Benefit claims include the following:
- Health insurance policies
- Disability insurance and payment coverage
- Life insurance
- COBRA policies
- Vacation benefits
Fiduciary breach claims focus on the actions of those running the plan. If the person does not follow instructions, misrepresents facts to participants or fails to make prudent investments, they could be in violation of their fiduciary duty.
ERISA Limits Damages
Even if you have an ERISA claim, know that the Act limits your damages. You can request the benefits you have lost and interest in past due benefits, but you will not receive pain and suffering or other non-economic damages. Some judges will allow attorney’s fees and the costs of starting and litigating your lawsuit. However, you will not be compensated for administrative remedies and the time spent on those resources.
If you have been denied valid benefits from your employer, or you feel that your employer has breached their duty to you as an employee, you can speak with an attorney that practices ERISA claims. Attorney Ethan Vessels can assist you with your ERISA case.
Schedule a no-obligation consultation at 740-374-5346.