Legislation Affecting Employee Benefit Plans

Employers need to be aware of the legislation affecting employee health plans. All states have their individual regulations, some of the major federal laws that govern employee health plans are as follows:

• The Employee Retirement Income Security Act of 1974 (ERISA)
• The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
• The Americans with Disabilities Act of 1990 (ADA)
• The Age Discrimination in Employment Act of 1967 (ADEA)
• The Civil Rights Act of 1964 (CRA)
• The Health Maintenance Organisation Act of 1973
• The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

4.1. ERISA: The Employee Retirement Income Security Act of 1974
This is the Federal Law that governs the self-funding of Employee Benefits. It mandates various qualification standards and fiduciary responsibilities on welfare benefit and retirement plans. The law is also designed to protect the rights of beneficiaries of employee benefit plans and allows self-funded plans to escape from individual state regulation through what is know as ERISA pre-emption.

4.2. COBRA: The Consolidated Omnibus Budget Reconciliation Act of 1985
This statute requires employers to make healthcare coverage available to employees that are retiring from the company or are leaving it and who would otherwise lose their group healthcare benefits.

4.3. ADA: The American with Disabilities Act of 1990
This statute makes it illegal to discriminate against persons with disabilities. Along with ADEA (see below) this law is enforced through the Equal Employment Opportunity Commission (EEOC)

4.4. ADEA: The Age Discrimination in Employment Act of 1967
This statute protects workers over the age of 40 from compulsory retirement and prevents adverse selection or dismissal based on age. Employers are subject to this act if they are engaged in interstate commerce and have 20 or more employees in each working day of 20 or more weeks in the current or preceding year.

4.5. CRA : The Civil Rights Act of 1964
Title VII of this law impacts employment law and makes it illegal to discriminate on the basis of race, color, sex (including pregnancy), national origin, and religion.

4.6. HMO Act: The Health Maintenance Organization Act of 1973 This statute regulates HMOs and sets the standard for federally qualified HMOs. Federal qualification is a guarantee that the HMO offers a wide range of services including Emergency Room Services, Preventitive Health care, mental health coverage, treatment for drug and alcohol abuse as well as In and Out-Patient hospitalization and physician visits.

4.7. HIPAA : The Health Insurance Portability and Accountability Act of 1996
Formerly known as the Kassebaum / Kennedy Health Insurance Reform Bill this law's principal purpose is to make health insurance more continuous for U.S. citizens. This is especially important to those with pre-existing conditions or chronic illnesses that may find coverage difficult to obtain were they to change or leave employment. Under HIPAA if an employee leaves or loses their job and can prove that they have been continuously insured for over 12 months they cannot be declined coverage or be charged higher premiums than healthy people. The law also restricts the ability of insurers to impose pre-existing condition exclusions. The law provides the ability to many people to change jobs without the worry of losing their healthcare benefits.