Halunen & Associates

Health benefits and retirement plans are an important part of any employee’s compensation, yet the plans themselves and laws that govern these plans can at times be very complex. At Halunen & Associates, we will do our best to make sure you receive your fair share of benefits under the latest ERISA standards.

The Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law mandating minimum standards for pension and health care plans, as well as protection of these benefits for the individual participants of these plans. ERISA demands that employers act prudently, loyally, and with the highest regard for the interests of its employees when it comes to plan management and plan investing. The act creates important protections for plan participants in four general areas:

1. Employees have a right to receive important information about plan features and funding
2. Those who manage and control plan assests must meet certain “fiduciary responsibilities” (see below).
3. Employees have a right to a grievance and appeals process for participants to get benefits from their plans.
4. Employees have a right to sue for benefits and breaches of fiduciary duty.

Fiduciary Responsibility

Those who manage pension and health care benefit plans - including plan trustees, plan administrators, and members of plan’s investment committee - must act with fiduciary responsibility. This means that they have an obligation to run the plan with the exclusive purpose of providing benefits and paying plan expenses, to administer the plan solely in the interest of participants and beneficiaries, and to act prudently with plan investments and take steps to minimize large investment losses. Plan managers must also avoid conflicts of interest.

Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.

Important Amendments to ERISA

There have been quite a few amendments to ERISA over the years, but two in particular have had a substantial impact in expanding the protections available to health benefit plan participants.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) - provides some workers and their families with the right to continue their health coverage for a limited time after certain events, such as the loss of a job.

The Health Insurance Portability and Accountability Act (HIPAA) - provides new protections for workers and families who have preexisting medical conditions or might otherwise suffer discrimination in health coverage based on factors that relate to an individual’s health.

An ERISA Lawsuit in Action

A recent ERISA lawsuit serves as an example of the extent of obligations employers have to their employees with regards to health care benefits. Hall of Fame football star Mike Webster, who played center for the Pittsburgh Steelers from 1974 to 1988, developed brain damage as a result of multiple head injuries he suffered as a player. Under the Bert Bell/Pete Rozelle NFL Retirement Plan, Webster was entitled to disability benefits to help pay for his medical bills and living expenses.

However, when the administrator of the Plan refused to pay Webster the more lucrative benefits reserved for players whose disabilities begin while they are still actively playing football, Webster sued using ERISA as support, claiming that the NFL was not acting reasonably with the “highest regard” for his interests. The courts determined that the head injuries sustained while playing were the root cause of his disability, and the NFL was forced to carry out its obligations under the Plan.

For more details on this particular case, please refer to Sunny Jani, Administrator of the Estate of Michael L. Webster v. the Bert Bell/Pete Rozelle NFL Player Retirement Plan out of the United States Fourth Circuit Court of Appeals.

Exceptions to ERISA Protections

There are a few important exceptions to ERISA coverage that are worth noting here. In general, ERISA does not cover group health plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment, or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.

Your benefits are important to you and to your future; and it’s important to us that you’re benefits are fairly protected.

If you feel that your retirement and health care benefits are not being responsibly protected, or if you feel you have not received your fair share, do not hesitate to phone our Minneapolis or Chicago offices, or to fill out a contact form. We would be happy to help you review your situation with a free initial consultation.