What Is an ERISA Health Insurance Plan?

Employee Retirement Income Security Act (ERISA) is a federal law that was passed in 1974 which set standards for many employee benefit plans including health insurance. An ERISA health insurance plan is offered by an employer that is subject to the terms set forth by ERISA.

Self-Insured Plan

An ERISA health insurance plan is an employer self-funded or self-insured plan as opposed to a fully insured employee health insurance plan.

State Laws

Self-funded or self-insured employee health care plans are funded by the employer and are not subject to state laws and regulations.

Fully Insured Plan

A fully insured plan means that the employer purchased an employee group health care plan from a private insurance company which is regulated by the state and subject to state laws and regulations.

Summary Plan Description

ERISA plans must provide each enrolled employee with a summary plan description which provides the employee with information on the plan, the benefits provided, what rights the insured employee has and other necessary plan information.

Appeals Process

The appeals process must be explained in the summary benefit plan. ERISA regulations protect the employee's right to an explanation for claim decisions and an appeals process for disputing claim denials.

Fund Administration

Some employers will retain an insurance company to administer the fund and process health care claims on behalf of the employer. Even though the insurance company is administering the self-funded health care plan, it is still subject to ERISA regulations because it is self-funded.

References

• U.S. Department of Labor: Employee Retirement Income Security Act--ERISA
• Department of Regulatory Agencies: ERISA -- Employer-sponsored Self-funded Health Benefit Plans