50 years ago – on September 2, 1974 – ERISA was signed into law by President Gerald R. Ford. The Employee Retirement Income Security Act has had a profound impact on how health benefits are provided to most working Americans.
Despite its impact, the legislation quietly passed and was signed into law in the summer that President Richard Nixon resigned. And while its passing was not as newsworthy as Nixon’s departure, 50 years later employers of all sizes have relied on ERISA to offer flexible employee benefit plans to their employees.
The keystone of ERISA – its preemption language stating that ERISA would preempt state laws as they relate to employee benefit plans – is still its foundation today. Although employers self-funded health benefit plans before ERISA became law, multi-state employers had to meet each state’s requirements if they had employees in multiple states. Preemption permitted the flexibility to provide a single set of benefits to employees across states.
ERISA continues to protect employees as well. The goal of ERISA Title I is to protect the interests of plan participants and their beneficiaries. ERISA requires that sponsors of private employee benefit plans provide participants and beneficiaries with information regarding their plans. ERISA also requires the individuals who manage employee benefit plans to meet certain fiduciary standards, report information to the government, and disclose benefit information to plan participants.
All in all, ERISA has served private employer plan sponsors well over the past 50 years. Here’s to (at least) 50 more!
For more information about ERISA, self-funding, or compliance in general, contact Erin Kelly, Director of Compliance & Human Resources.