ERISA Basics Every Small Employer Should Know
The federal law behind every benefit plan — what it demands even from a five-person company.
ERISA is the 1974 federal law governing employer benefit plans, and it applies the moment you offer one — there's no small-business exemption for the core duties. Most owners meet it for the first time as a stack of documents their broker hands over; knowing why the stack exists makes it manageable.
The core duties
Run the plan in employees' interest (fiduciary duty), describe it accurately in a Summary Plan Description, follow the written terms, and handle claims fairly. Carriers and administrators execute most of this for insured plans — but the legal duty stays with the employer.
ERISA also generally preempts state insurance law for self-funded plans — the quirk that makes big-company plans portable across states, and the reason MEWAs get special treatment: Congress explicitly carved multi-employer arrangements back into state reach.
Practical takeaway
For a small employer on an insured or level-funded plan, ERISA compliance is mostly paperwork discipline: keep the plan documents, distribute the SPD, deposit employee contributions promptly. Your broker should hand you the checklist — if they can't, that's the sign to find a better broker.
Educational content, not legal, tax, or benefits advice. FindGroupHealth.com is not affiliated with HealthCare.gov or CMS. Legislation statuses reflect the last-updated date above; see the official Congress.gov record for real-time status.