Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty.

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NEW DEFINITION OF HEALTH PLAN UNDER ERISA

To qualify as a group health plan under ERISA, an employer must have at least 1 eligible non-spouse “common law employee” enrolled. Please note: Children of 1 owner only or owner/spouse only business may be the other common law employee, if she/he is an eligible employee over the age of 18 (i.e., no longer a minor child per state law) and is enrolled for coverage.

Definition of group based on legal business structure:
Sole Proprietor: When the owner is the only eligible and enrolled individual (or the owner and his/her spouse), it is not a group health plan unless at least one other eligible common law employee (W-2 or 1099 for this business type) is enrolled in the plan.