ERISA — what is new?
In 2007, Unum updated the text of the supplemental pages it provides to customers whose insurance plans are governed by ERISA. Unum also began including a summary of its claims and appeals procedures with all of its group contracts and booklets. These changes do not reflect any change in the way claims and appeals are handled by Unum's insuring subsidiaries. Any questions regarding the plan in which you participate should be directed to your Employer.
Below is more general information on the applicability of ERISA and the support provided by Unum as a service to its customers.
In 1974, Congress passed the Employee Retirement Income Security Act (ERISA). This federal law set minimum operational standards for many private employer's retirement and welfare plans for their employees, including life, accident and income protection benefit plans. At the time, rampant abuses in the funding and administration of pension plans compelled Congress to act.
What is a "welfare benefit" under ERISA?
When an employer provides life, long-term income protection (short-term may be exempt), accident or long-term care insurance benefits to its employees, it is probably providing ERISA "welfare benefits".
Are certain employers and plans exempt from ERISA?
Yes. ERISA regulates private employers' retirement and welfare benefit plans. The benefit plans of governmental entities as well as church plans usually do not have to comply with ERISA. In addition, to the extent a benefit plan is put in place by an employer only to comply with disability laws mandated by states, such as California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico (also called "statutory plans") or state workers compensation laws, it is not governed by ERISA. Keep in mind though, that adding non-governmental employees to a government plan or offering more or better benefits than required by state law under a statutory plan can bring the plan under ERISA.
Each employer must review the characteristics of each of its employee benefit arrangements to determine whether its benefit plan is an ERISA plan. This should be done in consultation with the employer's experienced ERISA counsel. Unum relies on their group customers to inform them of their need for ERISA support.