What is ERISA Law and How Does It Affect You?

What is ERISA Law and How Does It Affect You?

A majority of Americans are not saving enough for retirement, and just a measly 10 percent of them are saving for retirement outside of work. So, when the time for retirement rolls around, many Americans are either left having to work longer or are forced to struggle financially after retirement.

Fortunately, to help combat this issue, the Employee Retirement Income Security Act (ERISA) is a U.S. law that was developed in 1974. This law was designed to establish standards, uniformity, and safety in regard to health, retirement, and pension plans employee’s receive.

The ERISA applies to private for-profit or non-profit companies that offer plans to employers, even if the corporation only has one or two employees. Chances are if you work for a private company or private employer, the ERISA applies to you.

The ERISA may affect you in the following ways:

1. Protects you as an employee

ERISA keeps the employee’s best interests in mind. The main protections of this act include the inability to be fired to prevent plan eligibility, the liability of an employer for mismanaging benefit funds, and the requirement that employers offer a pension or benefit plan to employees 21 or older who have been working for them at least a year.

2. Ensures plan information is more available to you

Under the ERISA, it’s required that you are disclosed certain information regarding your plan. This information includes your benefits, the rules for those obtaining benefits, plan limitations, and other vital information regarding receiving benefits.

3. Guarantees long-term disability benefits

For those who are disabled and cannot work at the time, you can receive long-term disability benefits thanks to ERISA. Prior to submitting a long-term disability claim, however, it’s important that you carefully read your policy, gather documents proving your disability, understand what your deadline is, and get copies of medical records.

How Else Does ERISA Affect You?

Apart from the latter, ERISA also sets a minimum for how much employees are required to contribute for participation, creates standards for how employers are allowed to regulate plan participation and acts as a safeguard to you as the employee to ensure your funds are protected and delivered to you at your convenience.

Although the ERISA protects you as an employee, the obligations it sets in stone can still be violated whether you get an insurance claim refused or are denied long-term disability benefits. However, ERISA also gives you the right to legally dispute violations. With a ERISA disability lawyer, you can settle your case and receive justice.


Preparing for retirement is not always the most important thing in someone’s mind. This is especially true for younger individuals as well as those within a lower income brack. However, preparation for one’s retirement years is critical.

Thanks to the ERISA Law, employers of private companies or private employers can ensure their retirement, pension, and health plans are protected, more transparent, and fairer on their part. The ERISA is just one federal law that helps make employee protection and retirement easier and more convenient.

Team LM
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