At Financial Clarity, we know that understanding retirement plans and healthcare benefits can feel overwhelming—especially when you're responsible for making the right choices for your team. That's where ERISA comes in.

ERISA (short for the Employee Retirement Income Security Act) is a federal law that helps protect the retirement and health benefits of American workers. Whether you're a business owner, HR manager, or plan sponsor, knowing your responsibilities under ERISA is key to staying compliant—and doing right by your employees.

Let’s break it down in a way that makes sense, so you can make confident decisions for your business and your team’s future.

What is ERISA, Really?

Passed in 1974, ERISA sets the rules for how retirement plans and health benefits are handled. It’s designed to make sure that plans are fair, transparent, and well-managed.

If your company offers a 401(k), pension, or health benefits plan, ERISA likely applies to you. It’s there to protect your employees—and to guide you in keeping those protections in place.

Why ERISA Matters to Employers

As an employer, ERISA affects how you choose and manage benefit plans. It means:

• You must act in the best interest of your employees (this is called a fiduciary duty).

• You must share accurate information about benefits and costs.

• You’re responsible for making sure any third-party vendors (like pharmacy benefit managers or investment firms) are doing their jobs properly.

In short: ERISA makes sure that everyone handling your company’s plans is doing the right thing—and if they aren’t, you could be held responsible.

The Role of Pharmacy Benefits Under ERISA

Today, healthcare benefits go beyond basic insurance. Pharmacy benefit managers (PBMs) are now a big part of how your team accesses and pays for prescriptions. If you offer prescription coverage, it’s important to understand that PBMs also fall under ERISA.

That means you, as the plan sponsor, need to know:

• What the PBM is charging

• How much of those costs are passed on to your employees

• Whether the plan is truly working in your employees’ best interest

Unfortunately, some PBMs hide fees or keep rebates that should be going back into your plan. Under ERISA, it’s your job to ask questions, check the details, and make sure your team is getting a fair deal.

Your Fiduciary Duties Under ERISA

If you manage a retirement or health benefits plan, ERISA says you must:

• Act solely in the interest of participants and beneficiaries

• Follow the terms of the plan

• Pay only reasonable plan expenses

• Monitor plan service providers carefully

That’s a lot to keep up with—but you don’t have to do it alone. Working with a trusted ERISA advisor, like Caroline Raker, can help you stay on track.

What Happens If You Don’t Follow ERISA Rules?

Non-compliance can lead to:

• Government fines

• Lawsuits

• Loss of employee trust

Even if a mistake wasn’t intentional, the law still applies. That’s why it’s so important to have the right support, systems, and strategies in place.

How Financial Clarity Can Help

At Financial Clarity, we help employers like you:

• Understand your responsibilities under ERISA

• Review and monitor service providers like PBMs

• Choose retirement and health plans that are fair, transparent, and cost-effective

• Stay compliant—and ahead of the curve

Caroline Raker brings deep knowledge in ERISA compliance, retirement planning, healthcare benefits, and Social Security optimization. Her mission is to give you the confidence to make smart, compliant decisions that protect both your people and your business.

Take the First Step Toward Clarity

Not sure if your benefit plans are ERISA-compliant? Let’s talk. Our team is here to simplify the process and help you feel confident in every decision you make.

🔎 Book a free consultation with Caroline Raker today.

Remember: When you know your rights under ERISA—and your responsibilities—you create a stronger, safer future for your business and your team.