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ERISA Explained (The Employee Retirement Income Security Act)

What is ERISA

Disability insurance for employeesIn 1974 Gerald Ford signed the employee retirement income security act (ERISA) into law in the rose garden on labor day. It was truly a momentous occasion.

If you’re old enough to remember what was happening in the economy back in the 70’s, you might remember that we had a lot of small, regional employers. And then all of a sudden the economy started really growing. We had employers who had employees in multiple states. The ability to treat them all uniformly became a real problem so we didn’t want a system where an employee in Ohio who worked for the same corporation claimed less benefit than the employee in New York. And so ERISA was the answer.

ERISA was a law that preempted all state laws on employee benefits. It created a uniformed system of taxation and generated one body of law to help understand the complex world of employee benefits. Especially for employers who were in multiple states.

Why ERISA is important

What does ERISA mean to you, the client?

ERISA is a case study in preemption. It basically is a law that preempts all other laws and so understanding ERISA is really important to understanding your employee benefits case.

What Cases are Covered by ERISA?

ERISA is a very broad and far reaching law and typically if you had to think about it as a non lawyer you would say that nearly every plan for an employee benefit that is offered to workers in the national economy would be covered.

There are a few exceptions. One is a religious institution, two would be the federal government and three would be state governments and any political subdivisions. So if you are a teacher, for example, in the school system, your benefit plan would not be covered by ERISA. If you were a judge in a courthouse you would not be covered under your benefit plan.

 

Questions?

 Call (877)-428-9806 and we will be happy to answer your questions or concerns re: your long term disability insurance claim.

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