It’s common for employers to provide certain benefits for their employees, many of which are subject to strict rules under the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code, and other laws. Employee benefits can include:
Keep up with the latest changes in laws regarding employee benefits with the Benefits and Compensation Law Alert and the Benefits and Compensation Law for Non-Profits.
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Laws affecting employer benefit plans
There are many laws employers need to take into account when evaluating their benefits packages. Some of these laws include:
- ERISA. The Employee Retirement Income Security Act (ERISA) sets standards for the establishment and operation of employee benefits plans. If you offer employees a health insurance plan or a retirement plan, chances are you’re covered by ERISA. Some ERISA requirements apply to both retirement and welfare benefit plans. (Welfare plans are generally those that provide health, life, or disability benefits.)
- ADA. The Americans with Disabilities Act (ADA) and ADA Amendments Act prohibit discrimination in benefits based on disabilities. For example, employer health plans can’t single out a group of disabled people for lesser benefits than individuals who aren’t disabled.
- Age discrimination laws. The Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) protect older workers from discrimination in their employment benefits. Employers can be liable for discrimination against active employees as well as retirees. That means you can’t give lower benefits to employees or retirees based on their age.
- HIPAA. The Health Insurance Portability and Accountability Act (HIPAA) also bars discriminatory practices in the handling of benefits. Additionally, HIPAA imposes portability, privacy, and certain other requirements on group health plans. On February 17, 2009, President Barack Obama signed an economic stimulus bill called the American Recovery and Reinvestment Act of 2009 (ARRA), into law, which expands HIPAA’s privacy and security regulations. Under the ARRA, business associates of covered entities will be directly subject to HIPAA. The stimulus plan also extensively changes HIPAA on other issues, including security breaches and related notification requirements, the rights of individuals regarding their protected health information, and increased enforcement and penalties for violations.
- COBRA. The Consolidated Omnibus Budget Reconciliation Act (COBRA) was designed to protect employees and their families from losing health benefits if the employees lost their jobs. Under COBRA, an individual may usually keep health coverage through a previous employer’s health plan for up to 18 months by paying 102% of the cost of coverage. Under the ARRA, the federal government pays 65% of COBRA premiums for up to nine months for employees who were involuntarily terminated between September 1, 2008, and December 31, 2009. Members of Congress in both the U.S. House of Representatives and the U.S. Senate have recently introduced legislation that would extend the original COBRA subsidy created by ARRA.
- Other laws. When evaluating benefits packages, employers also must take into account IRS regulations, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Mental Health Parity and Addiction Equity Act, the Medicare Modernization Act (MMA), Title VII of the Civil Rights Act of 1964, and the Equal Pay Act.
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including health benefits
Potential changes to health insurance and how it might affect employers
President Obama has stressed the necessity of health care reform in 2009, and Congress has been working on health care reform legislation for the last several months. The U.S. House of Representatives recently passed the Affordable Health Care for America Act (H.R. 3962), legislation that combines three different health care reform bills approved by House committees this summer. The massive legislation would create an insurance exchange that offers insurance through private companies as well as through a government-run public option. The bill would have a tremendous effect on employers through several immediate reforms, most of which would be effective for plan years beginning January 1, 2010, and through many other provisions that would generally become effective in 2013.
The U.S. Senate is also working on its own version of health care reform legislation. Senate Majority Leader Harry Reid (D-Nevada) is still trying to consolidate two Senate health care reform bills before he takes a final bill to the Senate floor for debate. If the Senate passes its own health care reform bill, it would have to be reconciled with the House bill.
Audit your health benefits policies and practices with the Employment Practices Self-Audit Workbook
State laws on employee benefits
States have continued to weigh in on employment and benefits issues. There’s been a steady trend for states to require employers or insurance companies to cover certain medical conditions, with coverage mandates increasing over the years. States also have a history of regulating workers’ compensation insurance, a parallel health insurance system for work-related injuries and illnesses.
State-by-state comparison of 50 employment laws in all 50 states
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- House Passes Momentous Health Care Reform Legislation
(Human Resources News, November 2009)
- House Health Reform Bill’s Impact on Employers
(Human Resources News, November 2009)
- Congressman Introduces COBRA Subsidy Extension Legislation
(Human Resources News, October 2009)
- Our Best Benefits Bet: Congress Will Extend COBRA Subsidy
(Human Resources News, October 2009)
- Managing Employee Health Insurance Premiums under Revised FMLA Regulations
(Georgia Employment Law Letter, October 2009)
- Employers Face Decisions for 2010 While Health Care Reform is Debated
(Federal Employment Law Insider, October 2009)
- Employer's Guide to Writing Employee Handbooks
(New York Employment Law Letter, August 2009)
- Using Wellness Programs to Reduce Health Care Costs
(Mississippi Employment Law Letter, August 2009)
- Paid Sick Leave May Soon be Federally Required
(Delaware Employment Law Letter, July 2009)
- House, Senate HELP Committee Health Care Reform Bills
(Human Resources News, July 2009)
- Online Resources for Information on Health Care Reform
(Human Resources News, August 2009)
- Using Wellness Programs to Reduce Health Care Costs
(Mississippi Employment Law Letter, August 2009)
- House, Senate HELP Committee Health Care Reform Bills
(Human Resources News, July 2009)
- Senate Finance Committee's Proposals to Expand Health Care, Reduce Costs, and Pay for It All
(Benefits & Compensation Law Alert, June 2009)
- Senate Finance Committee Maps Routes to Health Care Reform
(Benefits & Compensation Law Alert, June 2009)
- Health Care Reform: Taxing Health Benefits Could Cause Unintended Consequences
(Iowa Employment Law Letter, June 2009)
- Senate Report Outlines Possible Approaches for Health Care Reform
(Human Resources News, May 2009)
- IRS Issues New COBRA Guidance for Employers
(Human Resources News, April 2009)
- Health Care Outlook for Employers
(HR Hero White Papers, April 2009)
- New Requirements on Group Health Plans Starting April 1
(West Virginia Employment Law Letter, April 2009)
- IRS Issues New COBRA Guidance for Employers
(Human Resources News, April 2009)
- DOL Issues COBRA Model Notices
(Human Resources News, March 2009)
- What the Obama Stimulus Plan Means for Employers: COBRA, Benefits, and More
(HR Hero White Papers , March 2009)
- More Details on COBRA Continuation Subsidy in Stimulus Package
(Human Resources News, February 2009)
- Stimulus Bill Brings COBRA, Other Issues for Employers
(Human Resources News, February 2009)
- What Obama's Economic Stimulus Plan Means for Employee Benefits Plans
(Benefits and Compensation Law Alert , February 2009)
- Mental Health Parity Act Effective Date Delayed
(Employers State Law Alert, February 2009)
- Cutting Corners When Cutting Employee's Hours Can Cost Employers in the Long Run
(Texas Employment Law Letter, February 2009)
- New Law Addresses Mental Health Coverage Parity
(Utah Employment Law Letter, December 2008)
- HEART Act Provides New Employment Benefits for Military Personnel
(Federal Employment Law Insider, September 2008)
- IRS Issues New Guidance for HSAs
(Federal Employment Law Insider, August 2008)
- Employer Wellness Programs Need a HIPAA Checkup
(Oklahoma Employment Law Letter , July 2008)
- Looking at the Basics of a 401(k) Plan
(Arkansas Employment Law Letter, July 2008)
- 401(k) Fee Cases: Hot Area for Litigation
(Georgia Employment Law Letter, April 2008)
- Are Single, Childless Workers Shortchanged by Benefit Plans?
(Virginia Employment Law Letter, November 2007)
- HIPAA Security Rule Compliance Deadline Approaches
(Georgia Employment Law Letter, March 2006)
- House Passes Momentous Health Care Reform Legislation
(Human Resources News, November 2009)
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