South Carolina Life and Health Practice Exam

Employers must provide which of the following to employees under ERISA?

1. Yearly salary increases

2. Plan summaries and annual reports

3. Free health coverage

4. Guaranteed employment until retirement

The correct answer is: Plan summaries and annual reports

Under the Employee Retirement Income Security Act (ERISA), employers are required to provide certain disclosures to employees about their benefit plans, including plan summaries and annual reports. Specifically, ERISA mandates that employers give summaries of plan benefits and rights so that employees can understand their coverage and options. This ensures transparency and allows employees to make informed decisions regarding their health and welfare benefits. Providing plan summaries and annual reports includes details about the plan's rules, procedures, and policies, which helps employees to comprehend what benefits are available, how to access them, and what their responsibilities are. This element of ERISA is crucial for employee empowerment and protection, as it promotes accountability and informed choices regarding their benefits. The other options do not align with the requirements outlined by ERISA. Yearly salary increases and guaranteed employment until retirement are not mandated by ERISA, and while some employers may offer free health coverage, it is not a requirement under the law. Thus, the obligation to provide plan summaries and annual reports is a core aspect of ERISA compliance.