Many employers choose to provide a variety of employee benefits, or non-wage compensations, to their workers in addition to paying monetary compensation. Benefits can include group health, dental, or life insurance, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits. With proper legal advice, employees can take full advantage of their employers’ benefits plans and ensure that those plans are being properly administered. The three plans our firm most often advises clients about are ERISA, the FMLA, and COBRA. Contact us today with your questions.
What is ERISA?
ERISA, the Employee Retirement Income Security Act of 1974, is a federal law that guarantees certain categories of employees a pension after some period at their employer; sets minimum standards for pension plans by guaranteeing that pension rights cannot be unjustly denied to workers or taken from them; and requires that employers provide full and clear information about employees’ pension rights, including the way pension benefits accumulate, how the company invests pension funds, and when and how pension benefits can be collected.
ERISA further attempts to standardize pension plans and medical, surgical, sickness, disability, and death benefits plans and to ensure that the plans are financially sound and equitable. Both individual employees and groups of employees can challenge the employer’s failure to equitably and profitably administer an ERISA-governed plan.
The Client: 75,000 401(k) Participants.
Approach: Larry Schaefer participated in the prosecution of this novel ERISA class action, challenging management of 401(k) funds on behalf of more than 75,000 participants.
Solution: Class action status was approved and the case was settled for $26 million. Plaintiffs also obtained the appointment of an independent advisor to assist in fund management, comprehensive reporting obligations and introduction of new funds, and extensive reporting obligations.
The Client: 500+Pension Plan Participants Representing Terminated Executives.
Approach: Larry Schaefer participated as one of the lead counsel in an ERISA challenge to the failure to honor promises made following a company purchase in funding a pension plan, including taking the deposition of the CEO.
Solution: The case settled for substantial monetary and injunctive relief.
The Client: 33 year-old nurse and mother of five
Problem: State denied unemployment benefits after resigning from physically violent workplace
Approach: Appealed denial of unemployment benefits
Solution: Minnesota Court of Appeals reversed state’s denial; client received full unemployment benefits
Understanding ERISA Pension and Benefits in Minnesota
What is the Family & Medical Leave Act (FMLA)?
FMLA, the Family & Medical Leave Act of 1993, is a federal law that entitles “eligible” employees to take off up to 12 weeks of unpaid sick leave in any 12 month period for the birth or adoption of a child, to care for a family member, or if the employee herself has a serious health condition, without losing their jobs or benefits. An “eligible” employee is an employee who has been employed by the employer for a least 12 months and worked at least 1,250 hours. The 12 months do not need to be consecutive. You are only an “eligible” employee if your employer employs 50 or more employees within 75 miles of the worksite. If the company is a public agency, it is subject to provide FMLA regardless of the number of employees employed. If an employee qualifies and has unused FMLA leave time, the employer cannot deny FMLA leave.
When you return to work from family or medical leave, under the FMLA your employer is required to re-employ you in your original job or an equivalent. Although an employer cannot legally retaliate against an employee because the employee legitimately takes family or medical leave under the FMLA, the employer could be entitled to discharge the employee while on FMLA leave if the reason is not retaliatory under the FMLA and not wrongful termination in any other way. Minnesota has enacted its own version of the FMLA which is more generous in many respects than the Federal version. Employees are entitled to apply whichever version of FMLA is most generous to their situation.
What are COBRA Benefits?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a 1986 federal law. Minnesota has a version of COBRA called the Continuation law. Both laws require most employers to offer employees continuation of some health insurance benefits for a period of time after they leave employment. COBRA generally covers group benefit plans maintained by employers with 20 or more employees. If an employer has less than 20 employees, they are required to offer continuation of coverage under Minnesota law. In many cases, Minnesota law provides more coverage to the individual than does COBRA. In these instances, the employer must follow Minnesota Continuation law requirements. In some areas, however, Minnesota Continuation laws are silent where COBRA provides regulation.
If you’re covered by an employer-provided group health insurance plan, your employee rights might entitle you to COBRA or Continuation extended health insurance benefits if you quit or get laid off or fired from your job. Because the laws in this area can be complex, it is important to get good legal advice about which options are available. Our experienced attorneys can advise you about applicable laws to make sure that you can take full advantage of health insurance options available to you after you leave employment.
FAQs About ERISA Pension and Benefits in Minnesota
ERISA covers retirement plans and welfare benefit plans. In 2013, ERISA included roughly 684,000 retirement plans, 2.4 million health plans, and an additional 2.4 million welfare benefit plans. These plans cover about 141 million workers and beneficiaries, and include assets worth more than $7.6 trillion. The majority of America’s workforce earn retirement (54% of workforce) and health benefits (59% of the workforce) through their jobs.
The Employee Retirement Income Security Act (“ERISA”) of 1974, is a federal law that guarantees certain categories of employees a pension after some period at their employer; and sets minimum standards for pension plans by guaranteeing that pension rights cannot be unjustly denied to workers or taken from them. Additionally, ERISA requires that employers provide full and clear information about employees’ pension rights, including the way pension benefits accumulate, how the company invests pension funds, and when and how pension benefits can be collected.
ERISA requires a plan to provide participants with important information about their plan’s features and funding, provides fiduciary responsibilities for those who manage and control the plan’s assets, and requires a plan to establish a grievance/appeals process for participants to get benefits from their plans. It also establishes enforcement provisions to ensure that the plan’s funds are protected and that qualified participants receive their benefits, even if a company goes bankrupt.
ERISA sets minimum standards for most voluntary and privately established retirement and health plans, which includes protections for the plan’s participants. It requires the plan’s sponsors to provide plan information to participants. It establishes standards of conduct for the plan’s managers and other fiduciaries. Finally, ERISA gives participants the right to sue for benefits and breaches of fiduciary duty.
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