ERISA is an extremely complex and technical law. Historically it has been amended frequently by Congress, and been the subject of a great deal of litigation. Failure to conform to its requirements can create civil liability for the employer, and can cause the employer to lose a tax deduction for amounts contributed to the benefit plan. For these reasons, employers who are contemplating benefit plans covered by ERISA should obtain the advice of experts in this field before setting up the plan. MINNESOTA REQUIREMENTS FOR GROUP HEALTH AND LIFE INSURANCE Minnesota employers who offer group health insurance, health maintenance (HMO) coverage, or group life insurance must comply with Minnesota Statutes and regulations of the Minnesota Department of Commerce concerning those products. In addition, HMO coverage is also regulated by Minnesota statutes and regulations of the Minnesota Department of Health. This is the case regardless of whether the employer is also covered by ERISA, although in some situations ERISA may preempt state law. The state statutes and regulations establish minimum standards and requirements in areas like filing and obtaining approval of policy forms and certificates, minimum coverage requirements, content requirements for insurance certificates, limitations on cancellation and conversion procedures on termination of employment. As with ERISA, the state requirements governing these plans are technical and complex. Expert advice should be sought before establishing any of these plans. Insurance is regulated in Minnesota by the Minnesota Department of Commerce and, in the case of HMO coverage, by the Minnesota Department of Health. The departments may be contacted at the address and telephone number provided in the Resource Directory section of this Guide. RECORDKEEPING Both federal and state laws impose recordkeeping requirements on documents relating to employee benefit plans. These include plan descriptions, participants’ elections, worksheets and other documents. Retention periods range from six years to duration of the plan plus one year. Each year a comprehensive update of federal record retention requirements is published in the Federal Register. A business or government reference librarian can direct employers to the latest compilation.
COBRA NOTIFICATION
Health Insurance The federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers who sponsor group health plans to offer covered individuals the right to elect continuation of the group coverage under certain circumstances. Minnesota law imposes additional requirements on employers whose health plans are funded through insurance contracts.
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