What is ERISA and how does it relate to most employer-sponsored health plans?

• A. ERISA is a federal law governing private-sector employee benefit plans, including many group health plans.
• B. ERISA is a state tax code.
• C. ERISA is a patient privacy rule.
• D. ERISA is a medical treatment guideline.

Answer: (A)

ERISA is a federal law that governs private-sector employee benefit plans, including many group health plans. It doesn’t dictate which benefits must be offered, but it sets the framework for how those plans are run: plan fiduciaries must manage assets prudently and in participants’ best interests, there are rules about eligibility and vesting, funding, and required disclosures, and there are formal procedures for filing and appealing benefit claims. Because of ERISA, participants often have the right to sue for plan benefits or fiduciary breaches in federal court, and many state laws that would otherwise regulate these plans are preempted to keep protections uniform across states. It does not usually apply to government or church plans and is not a medical treatment or privacy rule.