(by Andres Rojas)
When faced with the oft-asked question of “how does the government enforce workers’ rights when it comes to employee benefits?” a straight-forward response is the best; the Employee Benefits (Security) Administration, or EBSA.
Ensuring the well-being of the health and retirement benefits of American workers is the responsibility of the Employee Benefits Security Administration (EBSA).
What Is the Employee Benefits Administration (EBA)?
The Employee Benefits Security Administration (EBSA) is a Department of Labor (DOL) agency that enforces the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) – Title II of ERISA is overseen by the IRS.
The EBSA’s role in the economy is massive as it tracks the running of more than 3 million plans (retirement, health, and others) which, when combined, amount to $10.7 trillion. The EBSA only oversees private employer-sponsored plans and isn’t in charge of supervising social security or public government-sponsored plans.
To protect the retirement assets of US workers, the EBSA invests in educating plan sponsors, members, participants, and service providers on their rights, responsibilities, and even cybersecurity best practices. In addition to education, the EBSA publishes guidelines and regulations that help plan sponsors to comply with ERISA regulations.
Although the EBSA doesn’t prosecute ERISA violators directly, it actively monitors every plan in America and assists the DOL in enforcing the law.
What Is the Employee Retirement Income Security Act?
The Employee Retirement Income Security Act (ERISA) applies to most private employers offering some type of group coverage. Among others, ERISA covers:
- Medical insurance plans
- Dental coverage
- Voluntary benefits – such as disability plans
- Profit-sharing plans
- Group life insurance plans
- 401(k) retirement plans
- Individual Retirement Accounts (IRAs)
The EBSA monitors these plans and contacts any sponsor who is in violation of their rules.
What Are Some Common ERISA Violations Enforced by the EBSA?
ERISA violations occur when sponsors fail to either meet the obligations set in the plan or those imposed by federal law. Some common ERISA violations that are enforced by the EBSA include:
- Breaking the terms of the plan
- Not providing all the documents required by plan participants
- Mishandling the plan or using it to benefit people other than its members and participants
- Failing to provide and oversee the plan’s service providers
- Misusing plan funds to benefit the plan sponsor, plan administrator, or other people related to them
- Valuing a plan’s assets at any price other than their current market value
- Punishing a plan member for using services covered under the plan
- Not filing Form 5500
How Does the EBSA Prosecute an ERISA Violation?
The EBSA employs a team of investigators and ben admin tools to probe for ERISA violations. When they find a plan that isn’t compliant, the EBSA will contact the plan sponsor and ask for them to make the necessary corrections.
If no solution is achieved, the agency will refer the case to the DOL for litigation. The DOL will keep any penalties earned and return all plan assets recovered to their legitimate owners.
Besides dealing with the DOL, the EBSA will also notify any other federal agency – like the IRS – that has a stake in the case.
Providing employee group coverage plans that both your employees and the EBSA will approve is a round-the-clock effort. So why not get expert help?