Employee Benefits Lawyers in Texas
Texas employee benefits lawyers represent employees in claims related to employee benefit plans. Your employer or former employer may have offered you benefits as part of your employment, such as a 401k plan or health insurance. These range from formal benefit plans like 401k, pension and health insurance, to bonus plans, paid sick leave and vacation pay. Many of these benefits are protected by law under the Employee Retirement Income Security Act (ERISA) that prohibits your employer or prior employer from abusing you financially or legally through plan benefits. Your employer may offer some benefits or even no benefits covered by ERISA. Some benefits offered may be outside the realm of ERISA.
Your employer does not have to offer any benefits (except those required by the Affordable Care Act); but once it decides to make ERISA-protected benefits part of your compensation it must comply with ERISA requirements. Some employee benefits fall under other federal or Texas laws while other voluntary benefits have little or no legal protections. Understanding the laws that govern benefits and how to protect them can be difficult. Working with a Texas employment lawyer familiar with ERISA and other benefit laws can put you in a better position to protect your rights.
What benefits ERISA protects in Texas
ERISA is a federal law that regulates most employee benefits plans like retirement and welfare plans offered by employers. This law sets out a complex web of regulations that govern the operation and allocation of benefits to participants and beneficiaries of benefit plans subject to the law. ERISA ensures that participants and beneficiaries are treated fairly under the plan and prohibits the plan administrator from promising benefits and then taking them away.
ERISA protects most health and retirement plans among other benefits for most private employees including:
- 401k plans
- Money purchase plans
- Employee stock ownership plans (ESOPs)
- Profit sharing plans
- 403b plans
- Employer-provided health insurance (including COBRA benefits)
- Some short term disability plans
- Long term disability plans
- Severance plans (but not all severance pay)
- Tuition reimbursement plans
- Defined benefit pension plans (including cash balance plans)
- Cafeteria plans
- Retiree healthcare plans
Common ERISA violations in Texas
ERISA benefit plans are expensive plans for employers to fund and operate. As a result, many employers negligently or intentionally mismanage their plans to save money. Employees working with plans may be under-trained to perform plan-related duties. Executives may make plan-related decisions with money in mind and impermissibly cut benefits (although not all benefit reductions violate ERISA). The employer may contract plan responsibilities to service providers who themselves may have employees working with your plan that are under-trained or ill-equipped to properly service the plan. Your employer may abuse the plan for its own benefit in violation of ERISA.
Regardless of the intentional or unintentional mismanagement, your rights and benefits under the benefit plans are in jeopardy. You may be at risk to lose money, access to necessary medical care and the ability to retire with financial security. Some common violations of ERISA that put you at risk include:
- Refusing to timely execute requests for benefit transactions;
- Intentionally or unintentionally under-calculating pension benefits to reduce payout;
- Arbitrarily refusing to pay for covered medical treatment under a health insurance plan;
- Arbitrarily or wrongly refusing to pay disability benefits;
- Refusing to process claims against plans in a timely manner;
- Misappropriating funds in a retirement plan by misapplying a QDRO;
- Firing an employee shortly before vesting in a benefit to avoid payment;
- Firing an employee to avoid the heath insurance costs of the employee and/or the employee’s family;
- Selecting service providers and plan investments based on prohibited kickback schemes;
- Intentionally or unintentionally misrepresenting plan benefits to avoid costs and payments;
- Taking negative action against an employee for requesting benefits or filing a claim against the plan.
Other laws that apply to these benefit claims in Texas
In addition to ERISA, your claims against the plan may also be subject to various state laws, including state securities laws, insurance laws, contract laws and labor laws. ERISA claims are complex with many technical requirements. Many ERISA claims for employee benefits have brief windows in which you must act to preserve a claim.
Non-ERISA employee benefits
Some employee benefits do not fall under ERISA. These generally include pay-related benefits and executive compensation plans. Benefits not covered by ERISA include:
- Non-qualified deferred compensation plans
- Non-qualified defined benefit pension plans
- Stock option plans
- Stock purchase plans
- Severance pay not paid through a severance plan
- Long term incentive bonuses and other forms of performance bonuses
- Other fringe benefits paid in-kind
Just because these benefits are not under ERISA does not mean protections do not exist under other statutes or regulations. Non-qualified deferred compensation and pension plans fall under parts of ERISA and IRC 409(a). Stock option plans and stock purchase plans are also covered by IRC 409(a). Pay-related benefits and bonuses may be covered by 409(a) but are likely covered instead under wage and hour laws. These benefits may also be covered by other state laws, including contract law.
Executive compensation plans
Executive compensation plans can give rise to complex claims due to the changes in the law over the past decade and the nature of these plans as deferred compensation. 409(a) plans can lock in money in very different ways from 401k and other ERISA-covered defined contribution plans. These unique features make financial and tax planning very important in the decision to participate and defer compensation to these plans.
Executive compensation plans can also be legally challenging for its participants because the employer does not have to fund the plan to a protected trust, as it does for ERISA plans, so the employee’s plan benefits may be subject to the employer’s creditors and may be reduced or extinguished in bankruptcy court should the employer file for bankruptcy protection. These plans can create complicated claims, especially when the employer files for bankruptcy.
Other non-ERISA benefits
Other benefits may be provided without any legal protections. A good example of this is vacation pay. Vacation pay is not a required benefit, provided voluntarily by some employers. The only protection for vacation pay is under the Texas Payday Law when an employee leaves the employer. If the employer has a policy to pay accrued but unused vacation pay then it must pay that vacation pay. If the employer does not have such a policy then the employer has no duty to pay out accrued but unused vacation pay.
Learn more about employee benefits in Texas
Looking for more information? Check out these posts about employee benefits in Texas:
- Top five questions you should ask about your 401k plan
- Why is there a 10% early withdrawal penalty on my 401k?
- Employers struggle to win overpayment cases against retirees
- Employee benefits and same sex marriage
- Health Savings Accounts
- Flexible Savings Accounts
- Can my employer stop contributing to my 401k?
- Should I invest in company stock in my 401k?
- Should I be concerned about 401k fees?
- What is a Summary Plan Description?
- What is ERISA?
Schedule a consultation with Texas employee benefits lawyers
If you believe your employer violated a benefit plan rule or retaliated against you for asserting your rights under a benefit plan, then you may have legal remedies against your employer. Schedule a consultation with an experienced employee benefits lawyer who can investigate your case and advise you on your options.