What Happens If Your Employer Fails to Comply with ERISA Regulations?

The Employee Retirement Income Security Act (ERISA) was established to protect the retirement and health benefits of employees. From overseeing pension plans to safeguarding health insurance coverage, the law promotes transparency, fairness, and accountability in administering these crucial benefits. But what happens if your employer falls short of meeting ERISA’s requirements? Here’s what you need to know.

Understanding ERISA and Its Importance

ERISA is a federal law enacted in 1974 covering most private-sector employee benefit plans. It ensures employees receive the benefits they’ve been promised by requiring employers to provide clear information, act in employees’ best interests, and meet specific legal standards when managing benefit plans.  

For employees, ERISA provides peace of mind, knowing someone is watching to ensure retirement savings, health coverage, and other benefits are secure. For employers, compliance is a way to build trust, maintain a productive workforce, and avoid legal repercussions.  

Common ERISA Compliance Issues

Even with its critical importance, ERISA can be complex, and many employers unintentionally or intentionally fail to comply. Some common issues include:

• Mismanagement of plan funds – Employers must act as fiduciaries, meaning they must manage benefits responsibly and in the best interest of participants. Mishandling funds is a frequent problem.
• Failure to provide required disclosures – ERISA mandates that employers give employees updated and clear information about their benefit plans, often through Summary Plan Descriptions (SPDs) and annual reports.
• Delayed benefits payments – Employers can’t arbitrarily withhold or delay benefits. Doing so violates employees’ rights.
• Retaliation against employees – If someone reports ERISA violations or seeks plan benefits, employers are prohibited from retaliating.  
• Lack of compliance with plan requirements – Plans must be administered according to specific terms, which some employers neglect to follow.

Consequences of Non-Compliance

For employees, employer non-compliance can mean lost benefits, confusion, or financial instability. For example, denied access to healthcare coverage or improperly reduced retirement contributions can be devastating.  

From an employer’s perspective, failing to comply can result in significant fines, lawsuits, and reputational damage. The Department of Labor (DOL) frequently monitors ERISA-governed plans and can impose penalties for errors or outright violations. Courts may also hold employers liable for compensatory damages or reinstatement of lost benefits.

What Can You Do if You Suspect Non-Compliance?

If you believe your employer is violating ERISA, there are several steps you can take to protect yourself:

1. Talk to your plan administrator – Sometimes, discrepancies or concerns arise from misunderstandings or clerical errors. Starting with a direct conversation may resolve the issue quickly.
2. Request plan documents – Under ERISA, you can request key documents like the Summary Plan Description or annual reports to better understand the plan’s terms and your rights.
3. File a complaint with the Department of Labor – The DOL oversees ERISA enforcement. If you suspect ongoing violations, filing a complaint with their Employee Benefits Security Administration (EBSA) is a powerful step.
4. Consult an ERISA attorney – ERISA is complex, and errors by employers or plan administrators can be difficult to identify. Speaking with an attorney ensures you fully understand your rights and the best course of action.  

Contact Us

At Bartolic Law, we help employees whose benefits have been denied or mismanaged. Whether you need guidance filing a claim, resolving a dispute, or advocating for your rights in court, we’re here to help. With decades of experience and a track record of success, we’re dedicated to turning denials into payments. Reach out to us today for a consultation to discuss your case and restore your confidence in your financial future.