Health Insurance, dental, retirement plans, voluntary worksite benefits, and other health & welfare plans require compliance with certain government regulatory agencies. Compliance typically includes the distribution of certain documents to employees about their rights within the benefit plans. Employers may also need to perform certain non-discrimination testing, and also retain certain documents, and follow certain procedures. Most private sector health plans are covered by the Employee Retirement Income Security Act (ERISA). Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans (participant rights), including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law. The U.S. Department of Labor's Employee Benefits Security Administration is responsible for administering and enforcing these provisions of ERISA. There are risks for non-compliance including penalties and business disruption.
4 ways you're at risk for ERISA violations
Are You “Doing Enough” to Avoid ERISA Statutory Penalties?
IRS Agent: "Let me see your Section 125 Plan Document"
If you are a business owner, or benefit manager, we can help you with compliance. We have information, and industry partners for your compliance needs. Our goal is to provide you with compliance awareness, a compliance advisement, and help you establish and maintain compliance, and reduce risk for business disruption, or fines, and have peace of mind about your company compliance status. Employer compliance responsibilities vary by compliance category and generally how many employees are working at the company, or enrolled in benefit programs. Employees may be counted in differently for ERISA, ACA Reporting, Medicare, COBRA, State Continuation, or other programs.
Compliance recommendation: Review our compliance advisement and decide on the compliance method that works best for you. Compliance service companies usually provide documents for retention at the business, documents to be distributed to employees, distribution instructions, and sometimes access to topic specialists to answer your questions, and provide you with support. Annual renewal documents may be needed if there are any plan changes or changes in legislation that may need to be included in the documents. There is some administrative energy and cost so set up and maintain compliance programs, but it is necessary to minimize risks for employers. If you are an employer customer or ours, and have not already done so, please decide what compliance method you want to use. Then, review, sign and return our Compliance Advisement. As agents, we may be asked to participate in the burden of fines and penalties for employer groups who are found to be in non-compliance, and we do not have professional liability insurance to protect us from this risk.
Benefit plan administration in general is about the setup, processing, renewing and servicing insurance and compliance programs. Administration can also refer to administering Flexible Spending type Accounts, 125-b Pre-tax favorable tax treatment plan, or Health Savings Accounts, Small Business Health Care Tax Credit program, or other programs. Plan administration may include writing legal documentation, purchasing plans, document preparation and distribution to employees, membership & billing, compliance notices, and more. The benefit manager has many different administrative duties and responsibilities to maintain benefit programs and compliance. This job is usually performed by company owners, benefit managers, and plan administrators, with support from their licensed Agent and Broker. We have numerous professional administrators to help you, and we also frequently comanage membership & billing systems at the plans. Let us know how we can support you with plan administration.
- AFLAC; this provider offers 125b pre-tax program compliance at no cost for their employer customers with enrolled employees
- Allegiance Benefit Plan Management; 125b, FSA, HRA, COBRA, Self-funding
- Core Documents; we are affiliated representatives. Review and purchase compliance and administrative services here
- Health Equity/Wageworks; 125b, FSA, HRA, COBRA
- Health Savings Account Bank; we are affiliated representatives and can help with individual or employer HSA Banking services
- PacificSource Administrators; 125b, FSA, HRA, COBRA
- Total Administrative Services Corporation (TASC); 125b, FSA, HRA, COBRA, ERISA, and many programs and services
Compliance and Administrative topics and notices explained
Affordable Care Act Exchange Model Notice
Certificate of Creditable Coverage; A certificate of Creditable Coverage is a document from a previous insurance carrier that shows that someone's insurance has ended. The insurance type is usually health and dental insurance. This includes the name of the member to whom it applies as well as the coverage effective date and cancelation date.
Children's Health Insurance Program Reauthorization Act Notice (CHIPRA); The Children's Health Insurance Program (CHIP) is a partnership between the federal and state governments that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women. Each state offers CHIP coverage, and works closely with its state Medicaid program. CHIP benefits are different in each state. But all states provide comprehensive coverage, like routine check-ups, immunizations, doctor visits, and prescriptions.
COBRA Notices; Consolidated Omnibus Budget Reconciliation Act; Employers with 20 or more employees are required to offer continuation of group health insurance for a period typically 18 months from the date the group plan ended. Employers must provide newly eligible employees with a COBRA initial general notice, and a continuation notice within 15 days from the former covered employees last day of group sponsored health insurance.
ERISA Wrap Document
The ERISA Wrap Document is designed to help employers meet the ERISA requirements to have a Summary Plan Description and Plan Document, for certain benefit programs. This document is distributed to employees by mail, or electronically. Business owners are responsible for the Wrap Document, even if the business owner has an assistant, or plan administrator, or payroll company helping with the document preparations. Insurance contracts, certificates of insurance and benefit summaries do not fulfill the ERISA requirements for the SPD and Plan Document. The fines and penalties for the employer can be from $159 per day, for each each penalty. We have compliance and Wrap Document providers that can make the documents for you, provide instruction, guidance, and give you access to topic specialists. Annual ERISA Wrap Documents are recommended to account for any plan changes, or legislative changes. This document is given to employees in addition to benefit summaries, summary of benefits and coverage, and carrier policy member certificates. Employers must now how and when to provide the compliance documents. Documents should be kept current and updated.
FMLA/OFLA - New April 2020; There have been recent Federal FMLA law changes, starting in about April 2020. There have not been changes like this in about 25 years. It’s very important to understand Employers with less than 50 employees are subject to the new FMLA laws. The new Federal Emergency Family and Medical Leave Expansion Act (EFMLEA) law changes were effective April 1st, and the Feds are giving employers until next Friday-May 1st to comply. We can educate you on the information, and help you with your compliance solution. We recommend a proactive approach to your leave compliance. Our Compliance and Administrative partner TASC can manage your FMLA and OFLA leave programs. With the financial impact of COVID, they are offering discounted FMLA fees $250 set-up/renewal, $1per employee per month. We have some flyers and additional service details at your request.
HIPAA Special Enrollment Rights Notice
Medicare Part D Creditable or Non-Creditable Pharmacy Notices; entities that provide prescription drug coverage to Medicare Part D eligible individuals and dependents, must notify these individuals, in writing or electronically, whether the drug coverage they have is creditable or non-creditable. This disclosure notice should be distributed to all Part D eligible individuals, including Part D eligible dependents. Because an employer plan sponsor typically will not know if a covered participants spouse or dependents may be eligible under Part D, it is recommended the employer provides notices to all participants in order to maintain compliance. The notice should be sent upon initial employee eligibility, and annually. Plan sponsors have flexibility in the form and manner of providing disclosure notices to beneficiaries. Under certain circumstances, notices can be provided electronically. Entities may modify the Model Disclosure Notices to notify affected individuals whether their drug coverage is creditable or non-creditable. The notice is completed based on the status of your Medicare prescription drug benefit that you provided to you administrator. Although employers may have a third party prepared documents, employers are ultimately responsible for preparation and distribution of this documents. These notice are provided to you by your compliance administrator, or found online at the Center for Medicare & Medicaid Services website here.
Medicare Part D Creditable or Non-Creditable Pharmacy Status Reporting; The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added a new prescription drug program to Medicare. Regulations to implement Medicare prescription drug coverage were published January 28, 2005 (70 Fed. Reg. 4193 (2005)). This guidance pertains to Section 1860D-13 of the MMA and 42 CFR §423.56(e). Under those provisions, most entities that currently provide prescription drug coverage to Medicare Part D-eligible individuals must disclose to the Centers for Medicare & Medicaid Services (CMS) whether the coverage is “creditable prescription drug coverage”. Medicare part D coverage reporting is due to the Centers for Medicare and Medicaid Services (CMS), and is the responsibility of the employer. Compliance administrators usually provide the employer with instructions on how to report the Medicare Rx coverage status to CMS. Employers must report the status of their Medicare Prescription Drug Plan annually HERE.
Patient Protection Choice of Providers
Pediatric Preventive Dental; Read more about this program HERE
Plan Document/Summary Plan Description; These documents are usually prepared by a professional administrator and come with instructional materials. These documents must be signed, then emailed back to your administrator. You should retain the signed document as your original. Next, distribute to all employees who are Participants covered under the Plan (a) the Plan Document/SPD and (b) the Certificates of Coverage you have received from your insurance carriers (and/or summary plan descriptions you have received from the service providers for your self-insured benefits). If you are confident that all current Participants covered under the Plan have previously received item (b) from all carriers/service providers, you must still distribute copies of item (a) but are not required to distribute (b). ERISA requires you to distribute the document to all participating employees within 90 days of any amended SPD and within 120 days of adding any new benefit. You must provide all participating new hires within 90 days of becoming a Participant in the Plan benefits with the completed document along with the certificates you have received from your insurance carriers. The included COBRA participants. When distributing the document, the Dept. of Labor requires you to use a method that reasonably results in full distribution to all employees who are participating in benefits. Keep in mind if you make any changes to your ERISA benefits or general plan information that affects this document, you should make the necessary updates to your Plan.
Section 125b Premium Only Plan (POP) document: This document is related to the 125b Pre-Tax program. This document is prepared specifically for a company health plan from information that company owners provide to the administrator. The pre-tax program allows qualified employees to pay health insurance, dental, and other certain benefits through pre-tax payroll deductions. Employees save by not paying taxes for certain qualified benefits, and employers save payroll tax costs. The document should be accepted and signed by a company officer and kept on file for review by employees, payroll companies, benefit managers, IRS, etc. An annual non-discrimination test is required for this program.
Section 125b Summary Plan Description (SBD): This document explains the Section 125b purpose, who is eligible, how to enroll, and more. The SPD includes information required by the IRS regarding the premium Only plan year start and end dates, agent for legal service, employer tax id. Employers must give this document free to employees who participate in ERISA covered health benefit plans.
State Continuation Notice; Oregon small employers are required to allow former covered employees the option to keep the group health plan coverage and rates, for up to 9 months. The notice is sent the employee when they are terminated form an employer health plan with fewer than 20 employees.
Summary of Benefits and Coverage; This is the government's standardized, universal benefit summary for health insurance plans. This document is required by the Patient Protection and Affordable Care Act and related regulations and rules; it is not a guarantee of coverage. Employer are responsible for distributing the SBC and providing it to plan participants, during the regulatory timeframes including; During open enrollment: Along with other written application materials that are required for enrollment or renewal, no later than 30 days prior to the first day of coverage. If multiple choices are available to eligible employees, the employer must provide the SBC for the plan in which the employee or beneficiary is enrolled. The employer must also provide SBCs for any of the other plan options as soon as possible upon request, but no later than 7 business days from receipt of the request. Renewal changes: If benefit changes are made during the renewal process, a new Summary of Benefits and Coverage reflecting these changes will be provided. The new document must be distributed to your employees no later than the first day of coverage. When newly eligible: Newly hired and newly eligible enrollees must be provided a Summary of Benefits and Coverage for each plan for which they are eligible by the date they become eligible for coverage. Upon request: The Summary of Benefits and Coverage must be provided to any eligible enrollee or beneficiary within seven business days of the request. Employees may also request a copy directly from their health plan.
Women's Health and Cancer Rights Act Notice (WHCRA); the Women's Health and Cancer Rights Act (WHCRA) includes protections for individuals who elect breast reconstruction in connection with a mastectomy. WHCRA provides that group health plans and health insurance issuers that provide coverage for medical and surgical benefits with respect to mastectomies must also cover certain post-mastectomy benefits, including reconstructive surgery and the treatment of complications (such as Lymphedema). The notice and additional information on this requirement are found at the US Department of Labor website here.