UGS ERISA Introduction



ERISA (Employee Retirement Income and Security Act) is the comprehensive federal law that regulates pensions, retirement plans and welfare employee benefits.  Title I of ERISA applies to and imposes requirements specifically on employee health and welfare plans.

Most employer and multiemployer sponsored health and welfare plans are covered under ERISA.  This is true whether the plans are small or large, fully insured or self-insured, although certain obligations may vary according to the size and type of plan.  Employers assume various roles under ERISA (whether named or by default) and should be aware of what plans ERISA covers and the associated compliance responsibilities and obligations.

Covered Plans

While most employers are aware that their health plan is covered under ERISA, they may be surprised to learn that many of their other welfare plans are also subject to this federal statute and its regulations.

ERISA Plan Criteria

To qualify as a health and welfare plan subject to ERISA, the plan must meet the following criteria:

ERISA Welfare Plans

The plans and categories shown in this section are not all-inclusive, and whether a certain type of benefit falls into these categories is fact-sensitive.  Any doubts or questions concerning ERISA’s application should be resolved by legal counsel.

Plan Exemptions

There are certain criteria that exempt plans from being subject to ERISA.

These exemptions include:

Reporting & Disclosure

The following is a list of some of the general reporting and disclosure notice requirements of ERISA.  In addition, there may be other non-ERISA disclosures that are required.  Employers should consult legal counsel for a determination of all (ERISA and non-ERISA) reporting and disclosure requirements that apply to their plans.

All Plans
Summary Plan Description (SPD)
Plan Amendments
Written Request by Participants for Plan Documents
Claim Procedures Notice

Additional disclosures required for Group Health Plans
Form 5500¹
Summary Annual Report¹
Claims Procedure Notice
Qualified Medical Child Support Order (QMCSO) Receipt and Determination Letters
HIPAA Certificate of Creditable Coverage
HIPAA Special Enrollment Notice
HIPAA Pre-existing Condition Initial & Determination Notices
Women’s Health and Cancer Act Notice²
COBRA General Notice and COBRA Election Notice³
Conversion Notice*

¹Applies to employers with 100 or more plan participants at the beginning of the plan year, and all “funded” plans (i.e. benefits are paid from plan assets rather than from insurance or the employer’s general assets)
²Applies to plans with mastectomy benefits
³Generally applies to employers with 20 or more employees (full-time and part-time) on more than 50% of its typical business days in the previous calendar year
*Required for certain COBRA qualified beneficiaries where the plan provides a conversion option

Employer Roles

Employers may take on different roles under ERISA, each with its own set of obligations.  The sub-headings under “Employer Roles” describes a distinct role, how to determine if the employer has assumed that role, and the associated responsibilities.

Please note that this section deals only with single employers.  While most Multiemployer plans or Multiple Employer Welfare Arrangements (MEWAs) are covered by ERISA, the rules may apply differently.  Please see Multiemployer or MEWA specific compliance topics for more information about these types of plans.

Plan Sponsor

ERISA does not require employers to provide benefits, but once they do, they become the “Plan Sponsor.”

Among other things, the Plan Sponsor is responsible for establishing, maintaining, amending and terminating health and welfare plans.

They also typically provide a portion of the funding required to operate the plan and pay benefits.

Plan Administrator

The ERISA Plan Administrator assumes the primary role for administering the health and welfare plan, and assumes the liability for failing to properly perform these duties.

ERISA provides that if the plan does not specifically name a Plan Administrator, then the Plan Sponsor (employer) assumes this role by default.  Even though as a practical matter the plan’s insurer or Third Party Administrator (TPA) may be performing most of the plan administration duties, they are not legally considered to be the Plan Administrator unless specifically identified as such in the plan document.  Therefore, most employers who sponsor ERISA plan are Plan Administrators.

The employer may designate an individual, specific position (such as “HR Manager”), or a committee as the Plan Administrator.  They may also name a person or committee to act on behalf of the Plan Administrator.  However, due the associated liability of this designation, legal counsel should be sought when determining the designated Plan Administrator.

The Plan Administrator takes on numerous responsibilities in relation to:

ERISA Fiduciaries

Every ERISA plan must provide for one or more named fiduciaries that have authority to control and manage the operation and administration of the plan.  Typically, the employer will be the named fiduciary, since it has discretionary authority in the administration of the plan.

In addition, many times the Plan Administrator is also a named fiduciary.

Plans may also name fiduciaries for specific plan responsibilities.

As an ERISA Fiduciary, employers must be aware that:

Additional Resources

Department of Labor Web Site

Understanding Your Fiduciary Responsibilities Under A Group Health Plan