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. A copy of the letter that was sent to customers notifying them of these changes, sample copies of the new text, and a Questions & Answers document can be found through the links below. These changes do not reflect any change in the way claims and appeals are handled by Unum's insuring subsidiaries.
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 customers to inform them of their need for ERISA support.
The following provides more information on the support offered by Unum to its group customers:
For more information about ERISA, please contact your local Unum service representative and ask about our Legal FOCUS bulletins.
Disclosure of plan information
The administrator of a plan governed by ERISA must make certain disclosures to all plan participants relative to eligibility requirements, benefits, claims and appeals procedures, and rights under ERISA. This is typically done through distribution of a document known as a summary plan description or SPD. As a service to our group customers and our insureds, upon request, Unum provides booklets that satisfy these initial SPD disclosure requirements.
If you have requested ERISA support for your benefit plan
Unum provides customers with policy booklets (also referred to as a Summary Plan Description or SPD), that fulfill ERISA SPD disclosure requirements. Our standard booklet includes:
- identifying information about the plan
- eligibility requirement and rights for plan termination
- claims and appeals procedures
- specific ERISA rights disclosures
You may work with your local Sales Representative if you have special needs for your benefit plan booklets.
For those customers who have not requested ERISA support for their benefit plan
Unum supports disclosure by providing information about our claims handling and appeals processes. We believe it is important that all of our customers understand how claims and appeals are handled so that they know what to expect if they need to file a claim or appeal. This information is provided to employers along with their contract and is provided to employees in their booklets.