ERISA, also known as the Employee Retirement Income Security Act, is a federal law that sets out rules to protect workers enrolled in retirement and health plans provided by their employers. Essentially, it ensures that employees receive certain benefits and rights when participating in these plans.
Under ERISA, employers are required to give all enrolled employees a Summary Plan Description (SPD) that explains the key details of the plan in simple terms. Additionally, they must keep a written plan document (ERISA DOCUMENT) and provide it to employees or new hires within 90 days of any changes to the plan. Failure to do so can result in penalties.
Moreover, if an employer's health plan has 100 or more participants, they need to file IRS Form 5500 to the Internal Revenue Service. This form helps ensure transparency and accountability in how the plan is managed. In essence, ERISA aims to protect the rights of employees and ensure they have access to the benefits they deserve through their workplace plans.
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