Employee Retirement Income Security Act ERISA

1. Employee Retirement Income Security Act ERISA

2. ERISA - Plan Administration

3. ERISA Basics ERISA Fiduciary Liability Voluntary Plans Plan Documents Summary Plan Descriptions

4. When Does ERISA Apply? ERISA § 3(1): “any plan, fund, or program … Employee benefit plan or plan - ERISA § 3(3)… Applies to “employee welfare benefit plans” Covers retirement plans and some other type of plans Focus on welfare benefit plans

5. Plan Administration – ERISA (con’t.) Covered Benefits: Medical, surgical, or hospital care benefits Benefits in the event of sickness, accident, disability, death or unemployment Vacation benefits Apprenticeship or other training benefits Daycare centers Scholarship funds Prepaid legal services Holiday and severance benefits Housing assistance benefits

6. What Is A Plan? Any ongoing administrative scheme Generally anything showing that employer contributes to benefits or administration is enough (including insurance coverage) Case law – single payment, no need for a scheme

7. ERISA Exemptions Exemptions Government and church plans Workers’ compensation Unemployment compensation Plans maintained outside the US for non-resident aliens Payroll Exemptions Wages, overtime pay, shift premiums, holiday or weekend premiums Sick pay or income replacement benefits (“disability”) Vacation, holiday, jury duty and similar pay

8. What Entities Are Relevant To A Plan? The ERISA Plan Separate legal entity (different from plan sponsor) Plan sponsor Establishes, maintains, amends and terminates its plans Plan administrator – responsible for compliance obligations under ERISA Running the plan Reporting and disclosure (Form 5500), liable for penalties if obligations not satisfied Not the same as TPA (plan administrator may delegate liability to TPA but retains ultimate responsibility) Named fiduciary Insurance company or HMO TPA – obligations are contractual in nature, not as the result of ERISA fiduciary status Participants and beneficiaries

9. Plan Documentation Requirements

10. ERISA Obligations Four main obligations for welfare benefit plans Written plan document Annual report Disclosure to participants and beneficiaries Fiduciary duties Includes claims decisions Additional requirements for health plans Alphabet (COBRA, HIPAA, MHPA, NMHPA, WHCRA, QMCSO) New PPACA mandates – uniform descriptions of benefits (first day of plan year after September 23, 2012) All ERISA obligations enforceable by individual participants

11. Required Plan Documentation No document does not mean no plan An ERISA plan can exist without documentation, but: ERISA requires employee benefit plan terms to be set out in writing Plan sponsor (employer) responsibility ERISA requires each plan to have: A plan document setting out all plan terms in full detail A summary plan description summarizing plan terms for plan participants Summary of Benefits and Coverage September 23, 2012 Current participants—first open enrollment/New participants—first plan year after September 23, 2012

12. ERISA Plan Document Requirements All plan terms and conditions: Plan operations Plan benefits Who gets benefits When Other ERISA-required provisions including: Named fiduciary Procedures for allocating responsibility Funding means or method to establish Basis on which payments are made to and from plan Claims procedure – expanded under PPACA which includes external review Amendment and termination procedure Persons with authority to amend or terminate Disposition of plan assets at termination Health plan provisions (COBRA, HIPAA, MHPA, NMHPA, WHCRA, etc.)

13. Why Haven’t We Heard About Plan Documents Before? No direct penalty for failure to have document Remote possibility of employee suing to enforce plan document requirement or criminal penalty Practical impact of not having plan document Nothing defines all of the terms of the plan Claims may be based on informal communications, past practice, etc. More stringent standard for review If participant requests the plan document? $110 per day penalty recoverable by participant

14. Employer Decides Plan Structure Employer can use plan documents to determine how many plans it has and which benefits are included in each “One policy/one plan”: each insurance policy/benefit contract is a separate ERISA welfare benefit plan Requires multiple Form 5500 filings Probably applies if policies/contracts are the only plan documents “Mega-plan”: all welfare benefits treated as one plan One 5500 covers all included benefits Requires plan document to define included benefits Optimum HIPAA arrangement to use the privacy shortcut as much as possible Use of excess plan assets Other

16. ERISA Reporting Employer Guide • ERISA Reporting/Disclosure Calendar for Welfare Plans Covering 100 or More Participants • ERISA Form 5500 Obtaining Mandatory "Filing Credential" from the Department of Labor • ERISA Summary Plan Description (SPD) Sample Provisions • Delinquent Filer Voluntary Compliance Program (DFVC) FAQs • Multiple Employer Welfare Arrangement (MEWA) FAQs • ERISA Wrapper Plan Document Amendment for Health Care Reform – 2011 • ERISA Disclosure Employer Guide • ERISA Applicability and Reporting/Disclosure for Welfare Plans Compliance Manual • ERISA Compliance Quick Checklist • ERISA Summary Plan Description (SPD) Required Information • ERISA Summary Annual Report for (Name of Plan) • ERISA FAQs • ERISA Electronic Disclosures and Recordkeeping Requirements • ERISA Summary of Material Modifications to Wrapper Plan for Health Care Reform -- 2011