The cost of medical treatment can easily bankrupt families who lack health insurance. Unfortunately, individual insurance is often too expensive for many working families to afford. Considering the high cost of health care, it's no wonder health plans are among the most desirable benefits of employment. In order to protect these vital benefits, the federal government has put in place a number of laws related to employer-provided health plans. Below, you'll find an explanation of these laws and how they affect your rights as a health plan beneficiary.
Employees' health insurance plans are governed by the Employee Retirement Income Security Act, or ERISA. The Act covers both retirement benefits, like pensions, and health insurance. The health insurance portion of ERISA has been amended several times, but two of the amendments are particularly important.
First, the Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows workers to continue on their employer's health plans even after getting fired. Second, the Health Insurance Portability and Accountability Act, or HIPAA, creates a way for insurance companies to transfer a patient's medical records to a different doctor or insurance company without impinging on the patient's privacy. While the Affordable Care Act is not an amendment to ERISA, it does have a large impact on how health insurance generally works and what health care providers should charge for routine and preventative care.
ERISA and its amendments do not cover every single health plan, only those that are purchased through an employer or a group, such as a union, for the benefit of the employees or members. Furthermore, ERISA does not require employers to provide health insurance. It only requires that any health plan provided complies with ERISA's requirements.
ERISA is a large and complicated statute with many different protections for health plan participants. Fortunately, patients and employees generally do not have to worry about ERISA compliance -- that burden falls on the employer. Here are the basic ERISA requirements that health insurance plans must meet:
If you think your employer or health plan is in violation of ERISA, you can file a complaint with the Employee Benefits Security Administration, or EBSA. You complaint will then be investigated. If it is sustained, your employer or health plan may be subject to civil and criminal penalties. In addition, it may be in your best interests to contact a local employee rights or ERISA lawyer, who can best advise you on your rights.