The Employee Retirement Income Security Act of 1974 (ERISA) is a comprehensive federal law that regulates pension, health and welfare, and other employee benefit plans. It was primarily designed to protect the interests of employees enrolled in employer-sponsored benefit plans.
ERISA protects the interests of participants and beneficiaries by:
ERISA is administered by the Employee Benefits Security Administration (EBSA), an agency within the U.S. Department of Labor.
If an employer offers a benefit plan for the purpose of providing one or more benefits listed under ERISA to employees and beneficiaries, such as medical, surgical, or hospital care, that employer generally needs to comply with ERISA. A common rule of thumb: any employer offering a group-sponsored health plan must comply with ERISA's notice, disclosure, and possibly reporting requirements, unless an exemption applies.
Examples of benefits subject to ERISA include group medical, dental, and vision coverage. They can also include life/AD&D, short-term and long-term disability, health flexible spending accounts, and health reimbursement arrangements.
Exemptions apply to organizations such as churches and government entities, as well as plans maintained solely to comply with workers' compensation laws or certain disability plans that fall under a statutory exemption. ERISA also does not apply to employers that don't offer any benefit identified under the law. For example, a municipality offering a medical plan to its employees would not need to comply with ERISA.
ERISA's requirements apply to small and large employers alike. Whether you have two employees or 200, you're responsible for providing proper disclosures and meeting fiduciary obligations. Reporting requirements, however, vary based on plan size and structure:
Plans that fall under ERISA include defined benefit and defined contribution plans, 401(k) plans, 403(b) plans, ESOPs, and profit-sharing plans. ERISA also covers private health plans such as health maintenance organizations (HMOs) and flexible spending accounts (FSAs).
Pension or health plans provided by federal, state, or local governments, Indian Tribal entities, and churches are not required to follow ERISA.
The list below is general and not meant to be all-encompassing.
ERISA covers general benefits that aid employees in the event of sickness, accident, disability, death, or unemployment, including:
The main types of retirement benefits covered by ERISA are:
Funded Vacation Benefits: ERISA can cover vacation benefits funded by employers, including accrued paid time off employees use for personal leisure, subject to ERISA's reporting and disclosure requirements.
Funded Apprenticeship Benefits: Benefits offered to individuals in formal apprenticeship programs, which may include retirement account contributions, health coverage, or other welfare benefits.
Care Assistance Programs: Employer-sponsored daycare services, eldercare assistance, or referral services to help employees manage caregiving responsibilities.
Higher Education Benefits: Tuition reimbursement programs, scholarships, or educational assistance loans offered to help employees pursue further education.
Holiday Benefits: Paid time off, premium pay for holiday work, or other holiday-related perks — employers must administer these consistently with ERISA's plan administration, reporting, and disclosure requirements.
ERISA compliance ensures that employer-sponsored benefit plans meet federal standards for transparency, reporting, and fiduciary responsibility. Businesses that offer retirement or health plans must follow ERISA requirements to protect employee benefits and avoid costly penalties.
There are five key responsibilities for employers to comply with ERISA:
1. Detailed disclosure to covered individuals (employees and beneficiaries), including plan features and funding details.
2. Annual reporting through Form 5500, if required.
3. A strict fiduciary code of conduct for plan sponsors and administrators.
4. Maintenance and distribution of Summary Plan Descriptions (SPDs) and Summaries of Material Modifications (SMMs).
5. Ensuring plans follow participation, vesting, and benefit accrual rules.
Compliance extends beyond meeting initial requirements. Employers must stay on top of ongoing obligations, including:
Staying on top of ERISA compliance requires proactive management, regular training, and thorough documentation. Employers should consult ERISA experts or legal advisors to ensure their benefit plans meet all regulatory requirements.
Keeping up with ERISA compliance means tracking key deadlines throughout the year. The dates below are based on a calendar-year plan (a plan year running January 1 through December 31) and recur annually. If your plan year doesn't follow the calendar year, recalculate these deadlines relative to your own plan year end.
Note: If an IRS or Department of Labor deadline falls on a weekend or federal holiday, it typically moves to the next business day.
January 31 — Employers must distribute Form 1099-R to participants who received plan distributions in the prior year.
February 14 — Deadline to provide defined contribution (DC) plan participants with their quarterly benefit/disclosure statement, including actual plan fees and expenses from the prior quarter. Due 45 days after quarter-end.
February 28 — Last day for plan administrators to submit Form 1099-R to the IRS (paper filing), reporting distributions made in the previous calendar year.
March 15 — Deadline to process corrective distributions for Non-Safe Harbor plans that failed the ADP/ACP test from the prior year, to avoid a 10% excise tax.
March 31 — Last day for electronic filing of Form 1099-R for the prior year's distributions.
April 1 — Required Minimum Distributions (RMDs) must be made to participants who turn 73 during the year, or those who terminate employment, whichever occurs later.
April 15 — Deadline to process corrective distributions for participants who exceeded the annual contribution limit under IRC Section 402(g) in the prior year.
May 15 — Due date for DC plan administrators to send quarterly benefit/disclosure statements for Q1, including actual plan fees and expenses.
June 30 — Last day to correct an ACP test failure from the prior year for a plan with an Eligible Automatic Contribution Arrangement (EACA), to avoid a 10% excise tax.
July 29 — Deadline to distribute any required Summary of Material Modifications (SMMs) for plan amendments made in the prior year.
July 31 — Form 5500 must be filed for ERISA-covered plans with a calendar-year plan year (unless an extension is requested).
July 31 — Deadline to file Form 5330 to report excise taxes on prohibited transactions or late plan contributions.
July 31 — Employers can request an extension for Form 5500 by submitting Form 5558, extending the deadline to October 15.
August 14 — Quarterly benefit/disclosure statements for Q2, including actual fees and expenses, must be provided to DC plan participants.
September 15 — Money purchase pension plans must make required contributions no later than 8½ months after the end of the plan year.
For S corporations and partnerships that filed a tax extension, employer profit-sharing and matching contributions are due.
September 30 — Summary Annual Reports (SARs) must be distributed to participants if Form 5500 was filed by the July 31 deadline.
October 15 — Last day to adopt retroactive plan amendments to correct an IRC Section 410(b) coverage failure or a Section 401(a)(4) non-discrimination failure from the prior year.
Extended deadline for Form 5500 if an extension was filed via Form 5558.
November 14 — Deadline for providing DC plan participants with their quarterly benefit/disclosure statement for Q3, including actual plan fees and expenses.
November 15 — If the Form 5500 deadline was extended, SARs must be distributed to participants within two months after the close of the extension period.
December 1 — Annual notice deadline for automatic contribution arrangements, including those under 401(k) and 403(b) plans.
December 15 — SARs are due if Form 5500 was extended using Form 5558.
December 31 — Deadline for discretionary plan amendments (with some exceptions).
Even well-intentioned businesses can run into compliance issues. Here are some common mistakes to avoid:
All employers offering a group health plan or other ERISA-qualified benefit to two or more employees are subject to ERISA, except for government entities and churches. ERISA's disclosure requirement mandates that employers maintain a written Plan Document and distribute SPDs to participants — often made easier by incorporating all benefits into a “wrap” plan document. A certificate of insurance or benefit plan summary is not an ERISA compliance document, nor is it a Section 125 cafeteria plan document.
The SPD must be distributed within 90 days after the participant becomes covered under the plan, or within 30 days of a participant's request.
Employers must have a cafeteria plan or premium-only plan (POP) document in place to deduct employee contributions pre-tax for qualified benefits, this is an IRS requirement. Failure to have a written Section 125 Plan document at the time of an IRS audit can trigger amended corporate tax returns, amended W-2s for affected employees, and amended employee tax returns.
Self- and fully-administered health FSA and HRA plans require formal documentation (a written plan document and SPD) and annual nondiscrimination testing. ERISA documentation should include all eligibility information, waiting periods, funding methods, and measurement period timelines for variable-hour employees, where applicable.
A common scenario: an employer hires a third-party administrator, adopts an HRA or FSA, and opens a separate employer-based account to fund the estimated liability. Unfortunately, segregating assets this way may create an actual trust account or take the employer outside Technical Release 92-01 (a rule exempting small employers from filing Form 5500), requiring a Form 5500 filing with a Schedule H or I attached.
Employers can avoid the appearance of a segregated or funded account by funding all benefits out of general assets and paying or reimbursing expenses from the employer's general checking account (or a zero-balance account in the employer's name).
Employers commonly update eligibility provisions (waiting periods, hours of eligibility) but fail to update their certificates of coverage to match — resulting in a plan administered differently than its documentation describes. This impacts both ERISA and ACA requirements and can lead to employee litigation.
Certificates of coverage are controlling; ERISA documentation should mirror their language. If eligibility or funding information has changed since certificates were adopted, request amended certificates.
Unless an ERISA wrap document is in place, employers should file a separate Form 5500 for each individual benefit contract. For example, an employer without a wrap document that has a fully insured medical plan and a fully insured dental plan should file two separate Form 5500s, each with an appropriately completed Schedule A.
Tip: Before creating a wrap document, evaluate the number of covered participants in each plan at the start of the plan year — benefits under the 100-participant threshold aren't subject to the filing requirement.
The Form 5500 filing requirement affects employers with 100 or more covered participants at the start of the plan year. Small employers may also need to file if any of their plans are considered funded (see mistake #4). Filing is due the last day of the 7th month after the plan year ends — for calendar-year plans, that's July 31 of the following year. A two-and-a-half-month extension is available by filing Form 5558 by the original deadline.
Tip: If you've missed a required filing, the Delinquent Filer Voluntary Compliance Program (DFVCP) can cap potential penalties. Don't wait until you're audited to become compliant.
Here is a quick checklist for small employers to check their ERISA compliance:
By not adhering to ERISA requirements, businesses open themselves up to costly fines that accrue every day they're out of compliance. Current penalty amounts include:
Common Mistake Alert: Many small businesses mistakenly assume the insurance certificate or carrier's benefit summary satisfies ERISA's SPD requirement. It does not — employers must prepare and distribute their own SPD, or use a wrap document, to remain compliant.
ERISA compliance isn't just for big corporations — it's a responsibility for most employers offering benefits. CoAd helps employers navigate plan documentation, filings, and deadlines so nothing falls through the cracks.
Whether you're filing a Form 5500, updating plan documents, or ensuring employees receive the right disclosures, partnering with CoAd keeps you proactive and compliant.
The U.S. Department of Labor provides helpful resources for employers:
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