The Employee Retirement Income Security Act of 1974 (ERISA) provides protection for members of group benefit plans offered by private employers. ERISA is designed to help ensure that employees receive the benefits they are entitled to and that these plans are properly managed. The relationship between the employer, the employee, and the plan is often arranged in such a way that the employer acts as an intermediary between the employee and the plan. In doing so, employers have certain obligations to their employees who are plan members or prospective plan members. Understanding these obligations can be crucial in being sure that any issue you may have as a group member is handled correctly. Following are some important examples of employer obligations under ERISA.

Types of Policies

Types of plans and policies governed by ERISA can include disability insurance, health insurance, life insurance, accidental death and dismemberment insurance, and pension plans. Employers’ obligations under ERISA may vary depending on the type of policy at issue, but employers generally have a fiduciary duty to ensure that they act in your best interest. This can mean your employer is obligated to facilitate your enrollment in the plan, including being sure that you have all the proper documentation and that you properly complete the application process. If you make a claim for, say, disability benefits, and the insurance company denies your claim on the basis that you were not covered by the policy at the time you became disabled because you had not properly submitted a part of the application, you may be able to pursue your disability benefits from your employer as well as the insurance company.

Plan Documentation and Disclosure

Employers must provide clear and comprehensive documentation about the insurance plan, including the terms and conditions of the policy and any material changes made to those terms and conditions. Once you enroll in your plan, you are entitled to these. Lacking such information can easily cause issues like missing a deadline or not providing information to the insurance company in the proper way. Should such circumstances lead to an adverse decision on your claim, your employer may be held liable for failing to provide you with this information.

Fiduciary Responsibilities

Employers must act in the best interest of the plan participants and beneficiaries. This includes:

• Duty of Loyalty: Employers must act solely in the interest of participants and beneficiaries, with the exclusive purpose of providing benefits.
• Duty of Prudence: Employers are obligated to act with the care, skill, prudence, and diligence required to properly facilitate employees’ needs in the context of the plan.
• Duty to Follow Plan Documents: Employers must administer an ERISA plan in accordance with its governing documents.

Claims and Appeals Process

ERISA mandates that disability insurance plans have a fair and transparent process for participants to claim benefits:

• Claims Procedures: Employers must provide a written explanation of the procedures for filing a claim for benefits. This includes the timeframes for making a decision and the process for appealing a denied claim.
• Appeals Process: If a claim is denied, participants must be given the opportunity to appeal the decision. The plan must provide a clear explanation of the reasons for the denial and the steps for submitting an appeal. ERISA also requires that appeals be handled by someone different from the individual who made the initial denial decision. As with enrollment, the employer has a fiduciary duty to facilitate this process for the employee.

Steps to Hold an Employer Liable For ERISA Violations

1. Internal Review and Documentation:
   • Gather Evidence: Collect all relevant documents, including any plan documents, claims forms, denial letters, and any correspondence with the employer or plan administrator.
   • Review Plan Procedures: Understand the plan’s claims and appeals procedures outlined in the plan documents.

1. File an Internal Appeal:

1. • Follow Plan Procedures: Submit a written appeal according to the plan’s provisions. Be sure to meet any deadlines and provide all necessary supporting documentation.
   • Maintain Records: Keep copies of all submitted documents and any responses received from your employer and/or the plan administrator.

1. Seek Legal Action:

1. • Consult an ERISA Attorney: If an internal appeal does not resolve the issue, consult with an attorney who specializes in ERISA law.
   • File a Lawsuit: An employee has the right to file a lawsuit against his employer in federal court for improperly denying benefits due under the plan, breaches of fiduciary duty, and other ERISA violations. Employers often act as a liaison between employees and the insurance company and/or plan administrator; therefore, should your employer fail to properly facilitate administration of your claim or coverage, it may be necessary to take legal action against your employer as well as the insurance company and/or plan administrator.

Legal Remedies and Outcomes

Employees who successfully prove ERISA violations can obtain various remedies, including:

• Recovery of Benefits: Receiving the benefits that were wrongfully denied.
• Restoration of Plan Assets: In cases of fiduciary breaches, courts can order fiduciaries to restore losses to the plan.
• Injunctive Relief: Courts can order employers to comply with ERISA requirements and correct plan practices.
• Monetary Damages and Penalties: Employers may be required to pay penalties for certain violations, such as failure to provide required documents.
• Attorney’s Fees: Achieving some degree of success on the merits of your case in federal court presents the opportunity to recover some or all of your attorney’s fees from defendants, including your employer.

Conclusion

ERISA provides robust protections for employees’ benefit plans, but enforcement relies heavily on employees knowing their rights and taking action when violations occur. By understanding the steps to hold employers accountable, employees can ensure their benefits are protected and that employers adhere to ERISA’s stringent standards. If you think your employer may be violating its ERISA obligations, reach out to the experienced ERISA attorneys at the McKennon Law Group PC for a free consultation today at (949) 504-5381.