Sometimes, yes. Employers often have the right to change health coverage and other workplace benefits going forward, but that right isn’t unlimited. Whether a change is allowed depends on the type of benefit, what the plan documents say, whether the benefit has vested, what promises were made, and whether the employer followed federal and Maryland notice and disclosure rules. Retirement benefits you’ve already earned, for example, generally receive much stronger protection than future health coverage.
At Lebau & Neuworth, we represent employees and plan participants across Maryland and DC in disputes over health, retirement, and disability benefits. We help workers identify the documents that control their benefits and determine whether a change crossed a legal line. Contact Lebau & Neuworth at (410) 296-3030 to discuss your situation.
Different benefits follow different rules, so the first step is identifying exactly what changed. Health, dental, and vision coverage, retirement and pension plans, disability insurance, and life insurance are often provided through formal employer-sponsored plans.
Paid leave, bonuses, commissions, and other fringe benefits are usually governed by employer policies, employment agreements, or state wage laws.
A reduction in your 401(k) match raises very different questions from a change to your vacation policy.
Most private-sector health, retirement, disability, and life insurance plans are governed by the federal Employee Retirement Income Security Act, known as ERISA. ERISA sets rules for plan documents, disclosures, claims procedures, and the conduct of people who manage plans. Some plans are exempt, including most plans offered by government employers and many church plans, which are governed by other laws.
Benefits like paid leave and bonuses generally fall outside ERISA, and Maryland law, including the Maryland Wage Payment and Collection Law, may apply instead, such as when an employer’s policy promises payout of accrued vacation. Knowing which framework applies shapes every other question.
In many cases, yes. ERISA generally doesn’t require employers to offer health benefits or to keep them the same from year to year, and many plans include language reserving the employer’s right to amend or terminate coverage. Employers commonly change premiums, deductibles, networks, or covered services at open enrollment or during the plan year.
That doesn’t mean every change is lawful. The change must follow the plan’s own amendment procedures, and employers must meet disclosure requirements. A change may also conflict with a written promise, a collective bargaining agreement, Affordable Care Act rules, or anti-discrimination laws. If you lose coverage because of a qualifying event such as job loss or reduced hours, COBRA, or Maryland’s continuation law for smaller employers, may give you the right to continue coverage.
Our page on health insurance and COBRA rights explains these protections.
Retirement benefits work differently. ERISA generally protects retirement benefits you’ve already accrued, and once a benefit vests under the plan’s vesting schedule, it typically can’t be taken away. ERISA’s anti-cutback rule also generally prohibits plan amendments that reduce benefits participants have already earned. Your own contributions to a 401(k) are always fully vested.
Employers can often change retirement benefits going forward, such as lowering future employer contributions, freezing future pension accruals, or changing the formula for benefits not yet earned. The line between protected past benefits and permissible future changes can be technical, which is why disputes over pension and retirement benefits often require careful review of the plan’s history.
The summary plan description (SPD) explains your plan’s terms in plain language, and plan amendments show how those terms changed over time. Look for a section on amending or terminating the plan, sometimes called a reservation-of-rights clause, along with the plan’s vesting schedule and any language promising that a benefit will continue for a set period or for life. Courts often consider the language of the SPD and related documents in benefit disputes.
ERISA requires plan administrators to keep participants informed. Under Department of Labor guidance, participants must receive an SPD within 90 days after joining a plan. When a plan makes material changes, participants must receive a summary of material modifications (SMM) within 210 days after the end of the plan year in which the change takes effect.
For group health plans, a material reduction in covered services or benefits generally must be disclosed within 60 days after the reduction is adopted. Separate Affordable Care Act rules generally require 60 days’ advance notice of certain mid-year changes to the information in a health plan’s summary of benefits and coverage. When a claim is denied, the plan must also give a written explanation and information about how to appeal.
Comparing old and new versions of your plan documents is one of the best ways to see exactly what changed and when. Save prior SPDs, open enrollment materials, benefit statements, and any notices you receive, even if they seem routine.
These documents can show whether a benefit had vested, whether the change was properly adopted, and whether you received the required notice.
Some benefit changes may raise legal issues, depending on the facts. These include changes that target an employee because of a protected characteristic or as retaliation for complaints or protected activity, or that break a clear contractual promise. ERISA also prohibits interfering with a participant’s right to attain benefits, such as terminating someone to prevent a pension from vesting.
Other concerns include fiduciary breaches by those who manage plan funds, changes that violate a collective bargaining agreement, and misrepresentations about benefits that employees relied on.
When a change affects many employees at once, a class or collective action may be an option.
If your employer reduced, changed, or ended a benefit:
The Department of Labor’s resources for workers and families also explain participant rights, and the Maryland Insurance Administration handles complaints about certain state-regulated insurance plans.
Lebau & Neuworth is one of relatively few firms that represents employees and plan participants, rather than employers, in ERISA litigation. From our office in Towson, our attorneys have recovered millions of dollars for workers in cases where employers or plan sponsors misused plan funds, breached their fiduciary duties, or refused to provide required plan documents. We review your plan documents, explain your rights in terms you can understand, and help you decide how to respond to a benefit change.
Stephen Lebau, Richard Neuworth, and our team represent employees throughout Maryland and DC in benefits, employment law, and related disputes, and clients often mention how responsive and honest our attorneys are. No outcome can be guaranteed, but understanding your plan early can protect your options.
Contact Lebau & Neuworth at (410) 296-3030 to discuss your benefits.
It depends on the plan and the circumstances. Employers can often change or end health coverage, but ERISA and the Affordable Care Act require notice of certain changes, including 60-day disclosure of material reductions in covered services. If you lose coverage because of job loss or reduced hours, you may also have continuation rights under COBRA or Maryland law.
Generally, no. ERISA protects retirement benefits that have vested and benefits you’ve already accrued, and your own contributions to a 401(k) are always vested. Employers can often change how future benefits accrue, but not reduce what you’ve already earned.
You can request the summary plan description, any summaries of material modifications, the governing plan document, and other key plan documents. Under ERISA, the plan administrator must generally provide them within 30 days of a written request, and a court may impose penalties of up to $110 per day for failing to do so.
