Administrative Requirements Under ERISA

ERISA requires that plan administrators do most of the legwork in complying with ERISA so you may not have to do much of anything unless you're acting as your own administrator. In many cases, if you have a plan with an insurance company, that company acts as plan administrator and takes care of these obligations. There are three main components to ERISA compliance:

• Reporting. ERISA requires that plan administrators file certain informational returns with the Department of Labor and the IRS, including a summary plan description that describes the coverage levels and claims procedures of your plan. Plans are also required to report when modifications (such as increased or decreased coverage, for example) to the plan have been made.
• Disclosure. ERISA requires that plan administrators share information with the plan participants and the Department of Labor upon request. Plan participants can get a wide array of information ranging from coverage levels to financial information.
• Paying claims. Every benefit plan subject to ERISA must establish a claims procedure to process claims for benefits. Plans are to provide information to a participant when the participant's claim has been denied.

Welfare plans. If you offer welfare plans subject to ERISA, your portion of the burden, if you have an HMO or another type of insurance contract, will be to distribute plan information to employees, which is easily done when the benefit plan goes into effect, or at orientation for new hires. To be on the safe side, you should still make sure that your plan administrator (whether it's a third party, the insurance company, or an agent) is complying with ERISA requirements.

Retirement plans. Retirement plans are subject to even more requirements under ERISA, including requirements affecting:

• plan distributions
• rollovers
• fiduciary responsibility
• recordkeeping
• plan loans
• reporting and disclosure requirements
• plan terminations