Group Insurance and Welfare Law - HRM 425: Benefits, Safety, and Health

Essay by ShanrachelleUniversity, Bachelor'sA+, November 2006

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If employers had it their way they would have employees working for them with as little as possible. Thankfully it is more of the unethical employers that would do this but even those organizations that are well-rounded in ethics can show a little of their bad side when it comes to benefits and money contributions. This is why laws and regulations were implemented into companies by the states and federal government so that those that want to withhold what is due to the employee; could not do so without a fare fight from the employee, which has caused many organizations to cease in these unlawful doings.

There are many laws that come into effect to protect individuals and their rights. One of those laws is the Employee Retirement Income Security Act (ERISA). This law was established in 1974, and sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

(U.S. Department of Labor) ERISA also covers multiple employer welfare arrangements (MEWA). MEWA promotes ways for marketing health and benefits to employers for the individuals working for them. In short, ERISA'S main purpose was to protect those who had worked long periods of time under pension plans.

The impact of ERISA on employers was brought forth to address fraud and mismanagement of employer pension plans. Not only does ERISA keep organizations honest in this aspect but they also apply to employees other benefit plans. Employers under ERISA'S preemption laws must finance employee health coverage by buying group insurance from HMO's, Blue Cross, and Blue Shield plans, or other insurance carriers or self-insuring by paying for employee health care out of the organizations own expenses. (Butler P.) With prices going up employers are having a hard time finding...