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Uniform Regulation/Transparency with ERISA#
Federal vs. State Requirements#
For the most part, the regulation of self-funded plans is uniform nationwide under federal law and the 1,000+ state-mandated benefits do not apply. This is not the case with fully insured health plans as they are subject to federal requirements and regulated on a state-by-state basis. Some public entities may be subject to special rules or guidelines.
The Employee Retirement Income Security Act of 1974 (ERISA) is the main law that applies to self-funded plans offered through private (non-government) employers. The Employee Benefits Security Administration (EBSA), a division of the Department of Labor (DOL), administers this series of standards with a focus on fiduciary duty.
ERISA was designed to be – and remains as – the ultimate consumer protection and transparency law, with considerable protection and structure for employers and employees.
Compliance Help from TPAs#
There are many provisions under ERISA and keeping track can become complex. Third party administrators (TPAs) are specially trained to work with these laws and they have an in-depth understanding of the details. Self-funded plans are also regulated by a number of other federal agencies, including:
- Department of Treasury
- Department of Health and Human Services (HHS)
- Equal Employment Opportunity Commission (EEOC)
- Department of Labor
How does the emphasis on federal regulation versus state regulation benefit self-funded employers? Those with multiple offices and/or employees spread throughout the United States, whether private or public entities, don’t have to adjust their administrative or compliance efforts by individual location. On top of that, TPAs are well-versed in working with ERISA and other federal requirements and serve as an invaluable resource when it comes to plan compliance.
For more information on ERISA and how it regulates self-funded plans, additional ERISA Compliance information is available from the DOL.