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Washington D.C. Benefits Law Blog

Enforcing your Employee Retirement Income Security Act rights

Those individuals who receive employee health insurance through a group benefits plan have certain rights and protections. A 1974 federal law called the Employee Retirement Income Security Act (ERISA) affords insured individuals these protections.

Those individuals covered under group benefits plans include yourself, dependents such as children and your spouse. ERISA allows you to remain covered even if you would typically lose health insurance benefits because a qualifying life event occurred.

Retirement plans that are protected by federal legislation

The Employee Retirement Income Security Act (ERISA) is federal legislation that allows government officials to maintain oversight over different employee-administered welfare plans and benefits. Some of the programs that federal officials oversee include health insurance policies and pensions. ERISA only covers two types of retirement plans, including defined contribution and benefit ones.

Administrators of defined contribution plans, including 401(k)s, employee stock ownership, 403(b) and profit-sharing ones, generally don't promise employees any specified benefit amount when they retire. Employers may contribute a certain percentage to complement what an employee invests into such an account, though. Employers generally take pre-tax deductions from their employee's pay and invest those funds into the retirement account on their worker's behalf.

What is the Health Insurance Portability and Accountability Act?

If you've been to the doctor, you've probably read or heard of the Health Insurance Portability and Accountability Act (HIPAA). This piece of federal legislation took effect in 1996. It amended the Employee Retirement Income Security Act (ERISA) once it became law. While you may have heard of HIPAA, you might not know what rights you're entitled to under it. You need to know this, though.

HIPAA is a federal law that protects both insureds and their beneficiaries. It doesn't matter whether these individuals secured their health insurance coverage through the marketplace as an individual policyholder or from their employer as part of a group health plan. It protects either one of these insureds and their beneficiaries.

Your right to severance pay may be protected by federal law

Companies are in the business of making money. As such, they sometimes have to downsize to remain profitable. There are other cases in which a company may align itself with a new investor who wants to take the business in a different direction. It's in instances like these that you may be doing everything you should, yet you're still let go. Some employers who unexpectedly lay off workers may offer them severance pay to cushion the blow.

If there's one thing you should know about severance pay, it's that it's not guaranteed. You're not entitled to it merely as a goodwill gesture for being laid off.

Who qualifies for Consolidated Omnibus Budget Reconciliation Act?

If you have a job with health insurance, then you may not want to do anything to jeopardize your access to those benefits. What happens if you leave your job though? You may assume that you'll become uninsured if you do. That's not necessarily the case though. You may qualify for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage.

COBRA is a type of temporary health insurance that's offered to individuals who've recently lost their jobs. Many part- and full-time workers who were previously covered by health insurance for one day or more qualify for COBRA upon termination from their role. It doesn't matter whether the individual left their role involuntarily or voluntarily in such instances.

How long do insurers have to respond to health insurance claims?

The Employment Retirement Income Security Act of 1974 (ERISA) is a piece of federal legislation that oversees administrators of certain private and public industry retirement, health insurance and other welfare plans. These groups must adhere to certain standards when responding to claims and inquiries about these different plans. Any administrator that fails to adhere to these protocols and deadlines may be exposed to legal liabilities.

Plan administrators are required to adhere to specific time limits when evaluating medical claims and approving or denying them. How long they're given greatly depends on the type of claim that is filed.

How long does an ERISA claim take?

You need coverage for specific costs and decide to file a claim through the Employee Retirement Income Security Act of 1974 (ERISA). How long is it going to take to get that claim reviewed? You're worried that you'll be kept waiting for weeks or even months with no resolution.

The good news is that specific time limits have already been established by ERISA, so you can find out roughly how long it will take, giving you a window of time in which you can expect results. There are three different categories with their own limits, which are as follows:

  • An urgent care claim. These claims should always get addressed within 72 hours, as technically, officials are supposed to do it as soon as possible.
  • A pre-service claim. Though perhaps not as urgent as the above, this is still before the service is provided and so it makes sense that you want to know relatively quickly. Therefore, it should not take more than 15 days. The government notes that they strive to do it "within a reasonable time period," so it could happen far faster than that.
  • A post-service claim. The goal for officials here is twice as long as the above, giving them a maximum range of 30 days. Again, they should review all claims within a reasonable time period.

The Employment Retirement Income Security Act protects your money

The Employment Retirement Income Security Act (ERISA) was signed into law by President Gerald Ford on Sept. 2, 1974. Although it's undergone many updates since then, it has much the same aim as it originally did. ERISA was enacted to make sure that those who manage health insurance, retirement accounts and other welfare programs are held to high standards and to make sure that they're properly managed.

Three federal agencies administer ERISA. There's the Internal Revenue Service which is run by the U.S. Treasury Department, the Pension Benefit Guaranty Corporation and the Employee Benefits Security Administration, a section of the U.S. Department of Labor.

ERISA lawsuit challenges Salesforce's plan management

A major employer in Washington, D.C., and around the country, Salesforce is facing an ERISA lawsuit over claims that it did not properly handle its retirement program. Specifically, the plan administrators are accused of breaching their fiduciary duty to plan members and beneficiaries. Salesforce, its board of directors and its investment committee are all named as defendants in the suit, which alleges that the company failed to save the assets of its plan members by opting for lower-fee investment management options. The large retirement plan had over $2 billion in assets in 2018, which the plaintiffs say gives it significant leverage in negotiating a better deal.

They say that Salesforce, in violation of its ERISA obligations, failed to reduce plan expenses or use its judgment to determine which investment options would best reflect the interests of plan participants and beneficiaries. The plan invests in a number of mutual funds, but the plaintiffs say that Salesforce did not take advantage of lower-cost share classes, causing the fund as a whole to lose out on income over the years. They also said that the investment committee did not consider alternative options that would provide significant savings.

Supreme Court Favors Plaintiffs in 'Actual Knowledge' Ruling

The recent US Supreme Court Ruling on the Intel ERISA Challenge stemming from a recent lawsuit regarding employee benefits has set a new framework for the establishment of "actual knowledge" in such cases. While this update out of Washington DC isn't major news for many political and commercial entities, it does have profound implications for employers across the country and members of the retirement planning industry.

The Supreme Court's unanimous ruling, which is defined in a 14-page document, favors the plaintiffs in the lawsuit known as Intel Corporation Investment Policy Committee v. Sulyma. The full extent and range of the ruling's impact has yet to be determined, but it has already had important consequences for companies in the retirement planning industry.

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