What is ERISA insurance coverage?

An ERISA fidelity bond is a type of insurance that protects the plan against losses caused by acts of fraud or dishonesty. Fraud or dishonesty includes, but is not limited to, larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, wrongful conversion, willful misapplication, and other acts.

How does ERISA affect insurance?

ERISA restricts the ability of states to enact laws that relate to employee welfare benefits, including employer-sponsored health insurance coverage. Under ERISA, states retain the authority to regulate insurance carriers and health maintenance organizations (HMOs).

What is the difference between an ERISA bond and a fidelity bond?

An ERISA bond covers employees who manage or have fiduciary responsibility for the company’s retirement fund. A fidelity bond covers employees who may not be able to receive a bond due to concerns with their personal background or employment history.

What plans are exempt from ERISA?

Governmental and church plans are exempt from ERISA’s mandates. Also exempt are programs maintained solely to comply with state-law requirements for workers’ compensation, unemployment compensation, or disability insurance, as are plans maintained outside the United States for nonresident aliens.

How long are ERISA bonds good for?

A fidelity bond’s term can’t be less than one year. However, it can be longer. Bonds that cover multiple years typically contain an “inflation guard” provision – so the plan’s coverage amount automatically satisfies ERISA each year.

What plans are not covered by ERISA?

In general, ERISA does not cover plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment or disability laws.

Are fully insured plans subject to ERISA?

If the plan is funded by contribution from the employer and employee, it is a self-funded ERISA plan and pre-empts state law. If the plan is funded by purchased insurance coverage, it is a fully insured ERISA plan and is subject to state law.

Is an ERISA bond a crime policy?

Employee Retirement Income Security Act (ERISA)​ bond coverage is often added to a crime policy subject to a zero retention in order to comply with ERISA bonding requirements.

Which employers are exempt from ERISA?

Corporations, partnerships, sole proprietorships, and non-profit organizations are covered, but governmental employers and churches are not, and are exempt from the application of ERISA.