People in need of disability coverage initially file with their insurance company. There are several providers who carry and support a range of claims. These insurers have benefits for short-term disability plans and others have policies to handle long-term claims. The Employee Retirement Income Security Act (ERISA) was created to help protect those enrolled in plans and their beneficiaries.
Inception and Purpose of ERISA
The Employee Retirement Income Security Act was created in February of 1974 and signed by President Gerald Ford the following September. With the security of the policyholder and their beneficiaries in mind, this bill has been amended several times since then to fit the needs of the worker for each era. In 2013, the total number of plans incorporated 141 million workers and their beneficiaries. This amounted to over $7.6 trillion in assets for those people. Even with these plans, only 54% of American workers earn retirement plans from their jobs, and only 59% have health benefits from their places of work.
Policyholders and insurers should know about this acts in order to not be mistreated. Since its inception, The Employee Retirement Income Security Act has provided a safety net for people with assorted benefits packages. This act requires individuals to be given full disclosure with information about their plan, keeping providers liable.
ERISA enforces provision to ensure that regardless if your place of work goes bankrupt, participants that qualify will still receive their benefits. This also helps prevent abuse or mismanagement of funds for retirement savings. Hopefully, allowing workers to have assurance they will receive their benefits, while holding the companies in charge of the funds responsible.
There are three parts of the government that enforce these aspects of ERISA; the Labor Department’s Employee Benefits Security Administration, the Treasury Department’s Internal Revenue Service, and the Pension Benefit Guaranty Corporation.
Learn more about Long Term Disability Insurance Denials.