ERISA basically means that if you decide to sue the insurance company for breach of contract if they deny your claim, you are not allowed to sue for damages. Meaning that the most an insurance company has to lose if you take them to court is the cost of the surgery... so they're no worse off, minus attorney's fees, which you may or may not recover, and run about $40,000 for ERISA cases. Fun right?
Here's some information on ERISA:
What does ERISA mean and how does it affect me?
ERISA is an acronym for a federal statute referred to as the Employee Retirement Income Security Act. This name is somewhat misleading because it sounds as though it only relates to “retirement income,” in fact, the act governs your entitlement to just about any employment related benefit, including retirement income, pensions, 401ks, disability benefits, group medical benefits, life insurance and death benefits and others. In addition, despite Congress seemingly passing a statute designed to protect the employee, the statute, in fact, does anything but that. The statute is a trap for the unwary and its provisions are slanted in favor of the employer or insurance company. It is an area of the law in which a person should seek legal representation.What Does Employee Retirement Income Security Act - ERISA Mean?
The Employee Retirement Income Security Act of 1974 (ERISA) protects the retirement assets of Americans by implementing rules that qualified plans must follow to ensure that plan fiduciaries do not misuse plan assets.
The Employee Retirement Income Security Act of 1974 (ERISA) protects the retirement assets of Americans by implementing rules that qualified plans must follow to ensure that plan fiduciaries do not misuse plan assets.
Investopedia explains Employee Retirement Income Security Act - ERISA
ERISA also:
1. Requires plans to provide participants with important information about plan features and funding. The plan must furnish some information regularly and automatically. Some of this information is available free of charge.
2. Sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, to accumulate benefits and to have a non-forfeitable right to those benefits. The law also establishes detailed funding rules that require plan sponsors to provide adequate funding for the plan.
3. Requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.
4. Gives participants the right to sue for benefits and breaches of fiduciary duty.
5. Guarantees payment of certain benefits if a defined plan is terminated through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation.
6. Protects the plan from mismanagement and misuse of assets through its fiduciary provisions.
This act was enacted to address irregularities in the administration of certain large pension plans - particularly the Teamsters Pension Fund, which had a rather colorful history involving questionable loans to certain Las Vegas casinos.
ERISA also:
1. Requires plans to provide participants with important information about plan features and funding. The plan must furnish some information regularly and automatically. Some of this information is available free of charge.
2. Sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, to accumulate benefits and to have a non-forfeitable right to those benefits. The law also establishes detailed funding rules that require plan sponsors to provide adequate funding for the plan.
3. Requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.
4. Gives participants the right to sue for benefits and breaches of fiduciary duty.
5. Guarantees payment of certain benefits if a defined plan is terminated through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation.
6. Protects the plan from mismanagement and misuse of assets through its fiduciary provisions.
This act was enacted to address irregularities in the administration of certain large pension plans - particularly the Teamsters Pension Fund, which had a rather colorful history involving questionable loans to certain Las Vegas casinos.
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