Life is becoming increasingly complicated for businesses that provide retirement and health benefits for their employees.
Among the reasons are the reporting and disclosure requirements under Health Care Reform as well as the Employee Retirement Income Security Act (ERISA). Compliance is critical, which is why you need a qualified insurance professional to guide you, but ultimately you, as the employer, will be responsible. If you are an employer who has taken on the role of plan administrator, keep an attorney skilled in business law on retainer.
“Noncompliance can result in fines, so make sure you’re providing the right documents at the right times,” advises Peter Abitanto, Senior Vice President of Sales & Marketing with Brown & Brown Benefit Advisors, an insurance brokerage that manages employee benefits and provide guidance to over 400 employer groups. www.advisorsbb.com
Even if your plan administrator is on top of things when it comes to compliance under ERISA, Abitanto suggests that you should be aware of the key components of the law. That means you are required to share all your documents upon request from the Department of Labor and should be prepared for an audit. Keep your documents current and understand what may trigger an audit.
ERISA is governed by the U.S. Department of Labor and enforced by the Employee Benefits Security Administration (EBSA)
Here are five things you, as an employer, should know:
- A Summary Plan Description (SPD) must be provided within 30 days of a written request. The SPD provides information on coverage levels, including rights and obligations.
- Many employers are out of compliance due to lack of awareness and prior limited enforcement, which has increased substantially in recent years.
- Common audit triggers include plan participant complaints, incomplete or inconsistent information reported on the plan’s Form 5500.
- If an employer receives notice of an audit, they have up to 49 items that could be potentially reviewed, which include the Plan Document and SPD.
- There is a timeline of plans and forms to be filed, including the aforementioned IRS forms, and Abitanto recommends a simplified overview at http://www.advisorsbb.com/pdf/ERISA_Compliance_Timeline.pdf.