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Health & Retirement Benefits Q&A

Health and Retirement Benefits

Frequently Asked Questions

What is ERISA?

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that protects pension and health plans in the private industry by setting minimum standards. 

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is an amendment to ERISA. It provides individuals with an opportunity to continue their health care benefits after the loss of a job.

What is HIPAA?

The Health Insurance Portability and Accountability Act (HIPAA) is another important amendment to ERISA. HIPAA protects workers from discrimination in health coverage based on pre-existing medical conditions and other factors relating to the worker’s health.

Does ERISA cover government employees?

ERISA does not cover group health plans established by the government. This protection is only for workers in the private sector.

Does ERISA require private employers to set up a pension plan?

No. ERISA only requires private sector employers that have a pension plan to comply with the minimum standards.

If an employee is laid off, is he entitled to his retirement money?

It depends on the type of pension plan that the employer has and the terms of the plan. There are two types of pension plans: defined contribution plan and defined benefit plan. 

If the employee has a defined contribution plan, a plan in which the employee and employer contribute to the individual account, then the employee may be entitled to a lump-sum distribution of the pension once the employee leaves the company. 

If the employee has a defined benefit plan, a plan that is funded by the employer and provides a specific benefit amount at retirement or that is based on a fixed formula such as the number of years worked and salary, then it depends on whether the employee has satisfied the conditions for receipt of the retirement benefits.

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