1. CLASS FOUR-EMPLOYEE BENEFITS

2. EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA) Employee benefit plans established for providing medical, surgical, hospital care or benefits in the event of sickness, accident, disability, death or unemployment. NOTE: Vacation benefits also included ERISA CREATED IN RESPONSE TO CONCERNS RELATING TO WORKERS BEING LAID OFF PRIIOR TO REACHING RETIREMENT

3. EMPLOYMENT RETIREMENT PLANS Highlights of Qualified Retirement Plans Written plan established by employer, designed to provide retirement benefits for employees Employer contributes to this plan on behalf of employee plan participants Regulated by Section 401(a) of the Internal Revenue Code and Title 1 of ERISA Funding channeled through trust that contains plan’s assets for benefit of plan participants and beneficiaries (NOTE: ERISA establishes a fiduciary duty on part of employer to properly manage the financial affairs of an employee) Set limits regarding payment of benefits Limits annual contributions and benefits

4. DEFINED CONTRIBUTION PLANS Individuals participating in plan assigned an individual account and employer contributes on behalf of participant Value of distribution depends on how long participant was in employer’s service upon leaving employment Value of distribution will be vested (accrued or complete) and amount employee receives is a portion of this amount Amount employee receives based on market value of employer and employee contributions minus losses.

5. TYPES OF DEFINED CONTRIBUTION PLANS Profit Sharing Plans Contains a contribution formula that may be a fixed percentage or participant’s compensation or discretionary by employer Formula allocating participant’s contributions, earnings, gains or losses based on participant’s compensation compared to the total compensation of plan participant’s in the plan year 401(k) – Employees can defer contributions from their salary based on a before tax rate basis NOTE: Some plans require an employer to contribute a specific amount (money purchase plan) or to provide a pension to employees over a period of years after retirement

6. Defined Benefit Plans; Continued Health Benefits Defined benefit plans A defined benefit plan systematically provides a pension to employees over a period of years after retirement, based on factors such as years of service, the participant’s age, compensation and possibly other variables. COBRA- calls for continuation of health benefits for as long as three years, after certain qualifying events, such as voluntary termination, discharge (not for gross misconduct), layoffs, divorce, or loss of dependent child status due to age, marriage or graduation from school.

7. Non-Discrimination Rules ERISA contains a non-discrimination provision. The pension plan cannot discriminate in favor of the highly compensated employees (those who own 5 percent or more of the company or who, as of 2007, earned at least $100,000). In order to comply with this provision, the safest thing for a company to do is to base pensions on dollar contributions or base them on a specific formula using a specifiied percentage of salary and factoring in years of service.

8. HEALTH INSURANCE PORTABILITY AND ACCOUNT ACT OF 1996(HIPPA)-Overview HIPPA says that insurers can only impose one 12 month waiting period for a pre-existing condition treated or diagnosed in the previous six months. Pregnancy is not a pre-existing condition, and newborns and newly adopted children who are added to the policy within 30 days of birth or adoption are not subject to the 12-month waiting period. Applies to Employers’ group health plans but employer not required to maintain a group health plan or provide particular health coverage

9. MEANING OF COMMON HIPPA TERMS Portability - New Employer’s health plan must consider, on a month to month basis, how long employee worked if previously employed, when calculating a “pre-existing condition” requirement under HIPPA Creditable Coverage – Includes health coverage that counts towards reducing pre-existing condition exclusion under new employee’s group health plan

10. NOTICE REQUIREMENTS UNDER HIPPA Group health plan cannot impose re-existing condition exclusion on participant or dependent before participant notified in writing Group health plan can determine individual periods of credible coverage upon receipt of prior plan’s coverage Group health plan must document period covered under preexisting condition exclusion and basis for determination

11. Aspects of HIPAA and COBRA coverage Pregnancy cannot be excluded from HIPAA coverage as a pre- existing condition. Pre-existing conditions cannot apply to newborns or adopted children, who are covered by a group health plan prior to enrollment in the plan. Note that neither HIPAA nor COBRA requires employers to have a health plan in the first place. However, most larger employers and even some relatively small employers offer health coverage to attract employees. If employers choose to have health coverage at all, they must comply with the relevant statutes.

12. Employees’ Remedies for Violations of ERISA 29 USC Sec. 1132 allows enforcement of ERISA by either the Secretary of Labor or in a private right of action. In addition to obtaining an order compelling an employer to make the required contributions, it is possible to obtain an award of liquidated damages. Moreover, attorneys’ fees can be recovered by an employee who is a prevailing party.