As an employer offering health insurance benefits, you have a responsibility to comply with the Employee Retirement Income Security Act (ERISA)—a federal law designed to protect employee benefits and ensure transparency in health plans. But did you know that failing to meet ERISA requirements can result in significant penalties?
Understanding ERISA compliance doesn’t have to be complicated. At Professional Insurance Programs, we recently hosted a webinar on ERISA compliance, and here are some key takeaways to help your business stay compliant and avoid costly mistakes.
What is ERISA and Why Does It Matter?
ERISA was created to protect employees’ health and retirement benefits by setting legal standards for plan administration. This law requires employers to provide certain documents and disclosures to employees, ensuring they understand their rights and benefits.
Failing to comply with ERISA regulations can lead to penalties of up to $195 per day per employee—not to mention the legal risks and administrative headaches that come with non-compliance.
Key ERISA Documents Every Employer Must Provide
To maintain compliance, employers must distribute the following documents to eligible employees:
✔ Summary Plan Description (SPD): Explains plan benefits and must be provided when employees become eligible.
✔ Summary of Benefits and Coverage (SBC): Provides a clear summary of the health plan’s coverage and must be given at enrollment and renewal.
✔ Children’s Health Insurance Program (CHIP) Notice: Informs employees about potential premium assistance for their children and must be distributed annually.
✔ COBRA General Notice: Explains employees’ rights to continue coverage if they experience a qualifying event.
✔ Medicare Creditable Coverage Notice: Required if your company offers prescription drug coverage, informing employees whether the plan meets Medicare standards.
✔ HIPAA Privacy Notice: Explains how employee health information is used and protected.
Employers must provide these documents at specific times, such as at enrollment, annually, or upon request. Missing these deadlines can lead to costly penalties.
ERISA Penalties for Non-Compliance in 2025
The Department of Labor enforces ERISA regulations, and penalties for failing to provide required documents are increasing. Here’s a breakdown of potential fines:
Failure to Provide SPD: Up to $195 per day per participant, with a max of $1,956 per request
Failure to Provide SBC: Up to $1,443 per failure
Failure to Provide CHIP Notice: Up to $145 per day per employee
These penalties add up quickly—making compliance a top priority for any employer offering group health benefits.
How to Stay Compliant and Avoid Penalties
✔ Keep Documentation Organized – Store ERISA-related documents and track when they are distributed.
✔ Work with a Third-Party Administrator (TPA) – TPAs can help ensure compliance with ERISA regulations.
✔ Conduct Annual Plan Reviews – Ensure that all documents are up to date and meet regulatory requirements.
✔ Educate Your HR Team – Make sure those responsible for benefits administration understand ERISA compliance.
At Professional Insurance Programs, we help employers navigate ERISA compliance with trusted partners and third-party administrators. If you’re unsure whether your business is meeting ERISA standards, we’re here to help.
Need Help with ERISA Compliance?
Don’t risk costly penalties! Professional Insurance Programs can help ensure you’re meeting all ERISA requirements and keeping your business protected.
Call us today at 800-637-4676
Visit insuranceformembers.com to learn more
By staying informed and taking the right steps, you can protect your business and your employees’ benefits—ensuring compliance and peace of mind.