What is the difference between ERISA-covered group plans and non-ERISA plans?

• A. ERISA governs most private-sector employer-sponsored plans; non-ERISA plans may be government or individually funded.
• B. ERISA applies to all government plans.
• C. Non-ERISA plans require annual tax penalties.
• D. ERISA plans never include health benefits.

Answer: (A)

ERISA governs most private-sector employer-sponsored retirement and welfare benefit plans, including many group health plans. Non-ERISA plans are typically government plans (federal, state, or local) or plans funded and administered outside the private employer context, such as certain church plans or plans not covered by ERISA.

Because of that distinction, ERISA plans come with specific protections and requirements: fiduciary duties for plan managers, mandatory disclosures to participants (like plan documents and summary descriptions), minimum standards for funding and vesting, and enforceable remedies through federal channels. Non-ERISA plans don’t have to follow these same rules and are governed by other laws or regulations applicable to government programs or non-private arrangements, which means different protections, reporting requirements, and oversight. This is why most private employer health and retirement plans fall under ERISA, while government and certain other plans do not.