While employers are not required to offer benefits to their workers, many employees in New Jersey receive health insurance and other perks through their jobs. Benefits plans that are offered by private employers are covered by the requirements of the Employee Retirement Income Security Act, or ERISA. This law protects workers who receive employer-sponsored pensions, retirement plans, health insurance coverage or profit-sharing plans.
What are the obligations of employers under ERISA?
Employers have several obligations under ERISA for the benefits plans that they offer. They are required to give their employees information about their plans and how they are financed. They must also establish grievance procedures for employees that include the ability to appeal decisions. Employers who administer plans also owe fiduciary duties to the plans’ participants. ERISA allows employees to file lawsuits against plan administrators or employers that withhold benefits that they are owed or that engage in conduct that breaches their fiduciary duties.
Violations of ERISA
Employers or plan administrators might violate ERISA in several ways. The most common types of violations include the following:
• Improper denials of benefits
• Interfering with the rights of plan participants
• Breaching the fiduciary duties owed to the participants
When ERISA is violated, the participants may file claims after they exhaust the administrative remedies within the plan. An action might also be filed against the employers or plan administrators by the Employee Benefits Security Administration. Employers that are found to have violated ERISA may face civil and criminal penalties. The plan participants who file complaints might recover benefits that were improperly denied, attorneys’ fees and interest from the date of the denial. If an employer or plan administrator is found guilty of criminal violations, an individual might face fines of up to $100,000 and up to 10 years of jail. Corporations may be fined up to $500,000.
Most employers offer fringe benefits to their employees to encourage loyalty and boost morale. ERISA helps to protect workers who participate in the benefits plans that are offered by private employers. People who have filed claims for benefits that have been denied may want to consult with an experienced ERISA lawyer for help with the internal claims process or with filing a complaint.