Employers Are Struggling With Changing Compliance Issues! Are You?

Changing benefits compliance issues have some employers irritated and confused!

Laws and regulations that affect the workplace are constantly changing. On top of that, employers have to keep up with industry-specific rules and regulations. The main challenges that employers face currently include keeping up with changing requirements for healthcare benefits and meeting new IT security requirements.

Why Do Regulations Change?

The Affordable Care Act made some major changes to the way employers have to provide benefits to their employees. There are new rules and regulations passed every year to help create a better and safer workplace for employees. The fact that a lot of business activities take place online also creates a need for new regulations, for instance when it comes to safely processing financial information. New regulations are also created in an effort to make consumers safer and to preserve the environment.

 

What Changes Could Employers Face In The Near Future?

The Trump administration is currently working on a new healthcare bill. This new bill will have an impact on the benefits that employers offer and will probably require a lot of business to offer different benefits. It is also possible that changes to immigration laws will affect the way employers hire new people and employers will have to keep up with new regulations regarding the use of technology.

Why Do Employers Struggle With Compliance Issues?

Complying with new laws and regulations is not always easy. Some laws are clear-cut and easy to implement. Others are more difficult to interpret and employers might not have access to clear answers regarding how these new regulations apply to them. Besides, a lot of new laws and regulations that affect the workplace do not receive a lot of media coverage. Unless employers make an effort to keep up with industry-specific news, they might not be aware that a new law is coming into effect.

How Can Employers Adjust To New Regulations?

It is important to have a plan of action to follow whenever new regulations are passed. Having a clear actionable plan will help employers adapt quickly and make the necessary changes. Employers should have some best practices in place to monitor industry-specific news and to keep up with new laws and regulations that are being passed, even if the mainstream media is not providing extensive coverage of these issues. Employers should also rely on audits to assess whether or not they are already complying with the new rules and to determine what needs to change. The next step should be to create a step by step plan that will be implemented to become compliant.

How Can Employers Become Compliant?

This really depends on the type of law or regulation that a business needs to comply with. An employer can become compliant with a new law by changing their benefits package, by providing additional training to employees, by upgrading their equipment or by putting new safety measures in place. Reaching out to legal professionals, cyber security experts and other professionals can be extremely helpful when an employer is not sure about the best course of action they should take to become compliant. Getting help from an audit service is also a good strategy since it can be beneficial to have an industry compliance expert review current business practices.

Why Do Businesses Need To Be Compliant?

Laws are passed in an effort to create a better workplace for employees, to protect consumers, to preserve the environment and to help businesses develop in a safe and sustainable way. Businesses that do not comply might be subject to fines but in most cases, employers will be given some time to make the necessary adjustments if an audit reveals some compliance issues. Keeping up with current laws and regulations is important because a business that is not compliant could face severe legal problems if an employee, a customer or even a business partner were to take legal action, either regarding the compliance issue or regarding another issue that could have been avoided by being compliant.

Keeping up with changing regulations is challenging for a number of businesses. It is important to have a detailed plan of action in place to find out about the latest changes, to assess current business practices and to determine what needs to change for the business to become compliant.


Have questions? Call us @ (515)-244-2424

Or E-Mail: info@bc2co.com

What Our ERISA Compliance Business Will Do For Your Company

Bc2 specialize in ERISA compliance and Form 5500 preparation.

Many accounting and law firms claim to be able to support your company in its efforts to be compliant. And, then the surprise letter arrives in the mail citing non-compliance and assessing thousands of dollars in fines for every employee affected by such transgressions.

Our ERISA compliance business will save you from extremely costly business-breaking surprises. We not only build a relationship with your company, but we provide a sturdy knowledge base that demonstrates expertise in all things ERISA compliance.

We even have proven client experience to show that we put you in the position to truly be compliant. This is one time to be ahead of the eight ball. No one wants to raise eyebrows at the Federal level. It is just another hassle and would cost a lot in pulling paperwork out of storage, off of old drives, while detracting resources from your business’s bread and butter: daily operations.

It is best to have a process in place that ensures all paperwork to be in compliance is completed and stored for easy access by HR. Our ERISA compliance business will set up such a process with you to ensure that it works within the scope of how your business already functions.

Congratulations if you own a business that is successful enough to hire on employees. Now, get ready to invest in them, according to the Federal laws and regulations, and local state laws as well. The Federal government’s ERISA is the topic here.

What Is ERISA?
The Employee Retirement Income Security Act of 1974 is also known as ERISA. It is actually a Federal law that on what types of information needs to be collected and filed away for employees who are going to receive benefits. It sets the bar for the minimum voluntarily pension, for instance, as well as for health plans for use within the private sector. In essence, ERISA provides protection for the individual employees who are parked in such plans.

Why Is ERISA Important?
While it is important to follow Federal laws to avoid costly fines, there are more compelling reasons to follow ERISA. For one, it is out of respect for the very people who contribute to your company, committing their time and lives to your success, essentially.

What Our ERISA Compliance Business Will Do For You
ERISA puts the obligation for administrative management of employee benefit plan paperwork on the employer who is providing such benefits. It includes plans such as retirement, health insurance, welfare and other benefits management. In other words, yes, ERISA makes requirements on employers about the way the benefits are managed.

As a compliance service provider, we ensure your company’s HR understand the legal requirements. This allows the HR team to adhere to ERISA properly. In addition, we recommend having HR management oversight to ensure that ERISA requirements are met.

What Does ERISA Cover?
As it turns out ERISA encompasses many different programs or welfare plans. In this case welfare plans refer to any funds, plans, or programs that give employees’s access to disability, death, and accident benefits, along with surgical, medical, surgical, and hospital access.

What many people forget is that unemployment insurance benefits are actually provided through contributions made by employers and administered through accurate payroll assignments by the employer on behalf of its individual employees. ERISA is very much connected to unemployment through new hire forms and taxation of the employer.

Other surprising areas touch by ERISA even include scholarships, days off, training plans, legal services, daycare, severance, and of course retirement programs.

ERISA Components
Reporting by administrators to the DOL and IRS simply means describing in summary how the employer’s coverage works.

ERISA Forms And Disclosure
Filing forms is a big part of the deal with ERISA. It requires annual reporting to the IRS on Form 5500/5500-SF. DOL welfare plan forms are required if there are more than 100 participants with full benefits. Other forms required by the IRS for retirement plans are not required to be filed at the same time as welfare plan forms.

Companies are under a lot of pressure to focus on their bottom line and in growing revenue. Turn to professionals like us to ensure ERISA compliance.


 

5 Form 5500 Changes In 2020

The Form 5500 is usually updated periodically to ensure that it stays current with the market and legal requirements.

The United States Department of Labor published a proposed rule on July 21, 2016 that seeks to improve and modernize Form 5500. Form 5500 is an annual report/return that employee benefit plans with over 100 lives covered are required to file. The changes are not likely to go into effect until the year 2020.

However, the proposed new developments are significant due to their focus on group health plans. The proposed rules are geared towards the elimination of current filing exemption for small group health plans and require group health plans to complete a new, detailed schedule.

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Does Your Business Need Benefits Compliance Consulting?

Here are 5 proposed Form 5500 Changes In 2020

1.     Companies Must Ensure the Transparency of Information Filed to the Department of Labor

The information should include where the money is invested and what fees it attracts including whether they are reasonable. It is believed that it will also offer further insight into the number of participants enrolled, dependents, employees, COBRA, and COBRA dependents and information pertaining to rebate handling, TPA payments for Self-insured and Stop Loss benefits, as well as past due payments.

2.     Forms Should Offer More Information Pertaining to Group Health Plans

The proposal will require new forms and will also require employers that have 2 lives covered to file Form 5500s, which could result in close to 2 million additional plans to file, which is a 23 times jump. The only exceptions to the rule are the multiple employer welfare plans and arrangements holding their assets in trust. Such types of plans already have to file irrespective of the enrolled count.

3.     The new Schedule J Has over 30 questions That Have to be Answered

Schedule J covers fees, rebates, self-insured benefits, premiums, compliance questions, and much more. While most of the questions are Yes/No type questions, some of them dig deep when it comes to matters related to compliance.

4.     Data Has to be “mine-able” to Allow For Machine Readability

This proposal is quite significant for the Department of Labor that has stressed in a current report to Congress that there are some major areas where it lacks complete information such as plans with self-insured medical benefits and plans that have less than 100 lives covered.

5.     The Updating of the Information of Service Provider Fees

Proposed Schedule C actually lowers the reporting threshold down to $1,000 or more from $5,000 or more for the vendors that provide service to plans holding their assets in trust.

The proposed changes mean that advisers will need to be on top of the extra information that employer, TPA, and carrier provide. It will be a game changer in several different ways for the 5500.

What Do The Changes Mean?

The proposed Form 5500 Changes in 2020 mean that there will be extra work for all the parties involved including brokers, employers, and companies that are responsible for the preparation and form-5500 changesproduction of the forms. While the changes will be most likely implemented in year 2020, now is the time for stakeholders and advisers to start preparations.

It is always advisable to be completely prepared when it comes to the proposed compliance changes and compliance questions. One area in Schedule J, asks for more responses and details if a firm has the right documentation in place for its plan, which is something the Department of Labor has been pushing.

The Department of Labor has stated that the changes will be communicated through its website and it will be up to brokers to ensure that they educate themselves on the proposed changes and companies to decide on the plans to produce webinars, white papers, and education pieces for.

Final Thoughts

The proposed Form 5500 Changes in 2020 are quite significant. It is therefore important for employers to monitor the proposed changes and determine how they are likely to affect them once they are finalized. Employers that have small group health plans that have been previously exempted from filing Form 5500 should ensure that they get in touch with the service providers to evaluate their options when it comes to filing Form 5500.

What To Expect When Using DOL Audit Preparation Services

Did You Know That Our Company Can Help With DOL Audit?

The U.S. Department of Labor conducts audits in an effort to help organizations adjust their policies and priorities. The purpose of audits is to find problems and areas that could be improved upon to reduce the risks of bad management, frauds and other problems. Going through a DOL audit can be stressful and you might be wondering how the audit will take place. Thankfully, there are DOL audit preparation services that can help you get ready for this process and give you a better idea of what to expect.

How Does The DOL Conduct Audits?

Businesses and organizations are selected in function of different criteria. Some businesses are audited because of past problems while others are selected because of the industry they are in. Audits are sometimes required by the DOL because there is a suspicion of fraud or because of the results of past reports and audits. In a lot of cases, businesses receive a notice with some details regarding the process. However, some audits are conducted without any warnings.

Why Should You Consider Using DOL Audit Preparation Services?

An audit preparation service can help you get ready for this process. The DOL usually shares information regarding what they will be looking at during the audit and what the objectives of the audit is. The professionals who work for preparation services are familiar with this process and will help you make sure that all the necessary documents are made available to the inspectors from the DOL. They will also help you understand what the objectives of the audit are and make recommendations if the DOL did not give you more details regarding the auditing process.

What Should You Do After Receiving An Audit Notice?

In most cases, the DOL gives businesses very little time to prepare. This is why you should contact a preparation service right away. You will get to ask questions about the audit and depending on your situation, the audit preparation experts you work with might recommend that you contact the DOL to ask for a time extension so you can prepare the records that will be necessary during the audit. This will give you more time to prepare and to ask more questions about the audit.

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What Should You Ask When Talking To The Auditors?

Most DOL audits have a fairly narrow focus. The DOL inspectors will probably want to see your records for a specific time frame or talk to specific employees. The audit might be about industry-specific compliances, safety regulations or about payroll. If you have been audited before or if you have encountered issues with something like overtime compensation or minimum wage compliance in the past, the auditors will probably focus on this same area.

What If You Have Made Mistakes In The Past?

Keep in mind that DOL audits are not about looking at past mistakes. If there have been some issues in the past, you need to show that you have addressed them and that your organization is now entirely compliant. If some issues are found during the audit, the DOL will issue some recommendations and will probably check again in the near future to make sure that you have made the necessary changes. The DOL auditors will definitely want to review your records and make sure that you are not repeating the same mistakes but past errors won’t be an issue as long as you made some changes.

What If There Are Some Current Compliance Issues?

It is best to reach out to a DOL audit preparation service like us if you know the auditors will find compliance issues while going over your records. The audit preparation specialists you work with will advise you on how to deal with the auditors and on how to show them that you are addressing these compliance issues. It is best to cooperate with the DOL auditors and to be upfront about any compliance issues that they might find. The audit preparation specialists you work with will also give you an idea of what the outcome of the audit is likely to be and advise on how to reach a settlement with the DOL. If there is a serious issue with compliance, they will probably recommend that you seek legal counsel after the audit.

How Can Specialist Help You Prepare For The Audit?

The experts who work for Benefits Compliance Consultants or BC2 know how these audits are conducted and will be able to review your records to make sure they are complete. They might notice mistakes with the FLSA classifications you use or might recommend that you update job descriptions. They might notice some inconsistencies in your records or that some policies are not always applied.

Working with an audit preparation service will make the auditing process a lot less stressful. These professionals can conduct their own audit and make recommendations that will help you comply with the DOL.

Contact us today if you need help with DOL Audit!

Call Us: (515)-244-2424

Why You Should Choose Our Benefits Compliance Consulting Firm

Do you want to hire a compliance consultant company that will make things easier for you? Do you want to invest on a good compliance consultant but don’t know how to find the best one? Simply, our compliance consulting firm will give you the best consulting service for your company. From the right questions to ask to the different things to look for when hiring a good consulting firm like ours, this article will give you an idea how to start.

Credentials

When looking for a compliance consultant, knowing whether they have all the proper credentials is a must. In order for you to have the best services, choose the one that is experienced and knowledgeable in the industry. Our compliance consulting firms will provide you with the necessary credentials to prove our expertise. A Compliance Certification is one of the first things that you should look for in a compliance consultant.

Certifications will assure you that the consultant have enhanced credibility, a broad knowledge about the job, and shows hard work and dedication in this field. Do not settle for a compliance consultant that cannot give you certifications that will prove their capability to you.

Experience is also one of the things that your compliance consultant should have, just like what everyone in our compliance consulting firms possesses. As there are different kinds of compliance services in the industry, having the one that is experienced on the specialties that you need is important. This gives you peace of mind knowing that the consultant you just hired specializes in the particular area where you need help.

The Cost

While our firms’ services are not cheap and may be costly for you, it is a better option than paying a more expensive amount for not complying with regulations which in addition will give you more stress and strain to your company. Having a good compliance consultant by your side may cost you money but it will give you the benefit of having a good integrity and respect from everyone in the community.

Your employees will also become more loyal to you because they know that you are providing them with a true and honest system at work. Having a clear conscience is also an advantage for you because you know that you are doing the right thing for everyone. Hiring a compliance consultant like BC2 by your side is an investment, not an expense.

The Strategy

After getting all the characteristics above, the next thing to know about your chosen consultant is his or her strategy.  It is essential for your consultant to have a clear plan and strategy on how he will be effective for the job. I assure you that a good compliance consultant that knows the job really well can provide you with the strategies that he will use because he is not merely guessing everything he has to do with this job. Some strategies that you may want to hear from a compliance consultant are the following,

-Implementing policies and procedures properly.

-Appointing an internal point person for the company’s compliance officer.

-Provide you with trainings that will educate everyone.

-Improve communication lines by making it more accessible.

-Organize internal monitoring for the company and auditing.

-Give disciplinary guidelines that will enforce the standards.

-Immediately respond to offenses that have been committed and take the proper corrective and disciplinary actions needed.


To be able to get a consultant’s plans and strategies for your company, you can ask for a proposal that will give you an idea on how he plans to achieve successful and positive outcomes for your company to improve your business.

The Rapport

As you will be working with a compliance consultant for quite a long time, why not choose someone who you like and will be comfortable to work with because they are a partner for you in achieving goals for your company. Someone whom you can trust and respect is the right person for this job and we are that company that you can trust.

Getting a compliance consultant for your business can be tough. You won’t know if the consultant is trustworthy enough for you. But our firm will make sure that you get the best compliance consultant for your team. We will assure that you’ll be able to work with a consultant that knows everything about the field that your business belongs to. Don’t waste your time with consultants that will offer you cheap but unreliable services. Choose reputable consultants like www.bc2co.com to give your business the best service that you can get today.

Call if you are ready to discuss your needs at (515) 244-2424

Or you can request a quote

Our Compliance Consulting Firm Can Help You Get Your Business Organized

There are quite a few reasons why business owners of all types reach out to consultants like www.bc2co.com. Many aspects of running a business require additional outsourced help without necessarily adding people to the payroll. It certainly is beneficial when you have consultants on your side to act quickly, help you problem solve, figure out solutions and find avenues for growth. Compliance is also key, and our compliance consulting firm is ready to serve you.

What is compliance all about? Well, if you are reading this post you probably have some idea but let’s pretend you don’t because there are many compliance issues that can arise, but let’s first talk about taxes. How do you feel about your taxes? Business owners can feel great about keeping the books and day to day operations, but when it comes to tax time, each new year can be a major headache. Not to mention, it’s not just the end of the fiscal year when business owners have to concern themselves with taxes. After all, you are making quarterly tax payments, filing receipts and keeping up with taxes throughout the year, aren’t you?

Do you need any documents prepared? Maybe you have been finding yourself with ongoing tax questions, and our compliance consulting firm could make things easier on you. It would be easier on everyone if taxes weren’t so difficult, right? There are people talking about wanting to change the tax laws, but we will see. Until then, we are here to serve you anytime you need consulting on any matters related to compliance issues.

What do you know about ERISA compliance? This has everything to do with employee benefits. We can even help you provide the best solutions of course. We will evaluate your business based on compliance laws and regulations and will help you determine how you need to move forward. Of course we aren’t in the business of compliance to out you as the business owner through the ringer. We want to help you succeed, and we are here to show you our undivided attention and dedication to finding the best and most affordable solutions for your business.

It matters who the compliance firms are networked with when it comes to helping you get things done. With the right connections, and we do have them, we can help you with all kinds of situations. What is your biggest concern right now? Where would you like us to get started? The introduction to our services began with tax compliance because that is an area where many business owners feel they need help.

Properly orientating, training and providing benefits to employees is also key as mentioned. Is your facility meeting safety standards? You don’t have to be told that this is huge. If there is anything wrong, it needs to be fixed. Safety standards must be revisited all the time to be sure your business is handling everything appropriately. What other kinds of compliance issues can arise? Why else would you need the services of our compliance consulting firm?

You can be sure that you are even going to find out more about what we can do for you when you call us. We will handle all of your questions. If there is something we can’t do, we can tell you why and still help you try and figure out what to do. We want to see you succeed as a business owner and not have to worry about compliance issues anymore. You can continuously consult with us as you see fit or check in with us again when you need our services in the future.

Understanding compliance can even be a little difficult if you are new to the game. That is even more of a reason to reach out to us so that we can go over all the concerns you have. Maybe a recent event has you questioning whether or not you need consultants to run a compliance check on your business. Don’t leave anything undone, and let us tell you if there are changes that need to be made. Perhaps you are told changes are necessary, but you don’t know what to do next. We can help you figure that out, too. For everything concerning compliance, we can assess what is going on and what is needed.

We are here to serve and help your business succeed with benefits compliance needs.

Request a quote here: GET QUOTE

Or call us at (515) 244-2424

Form 5500: Its Changes and Implications

Filing the Form 5500 is a regulatory requirement imposed by the government among benefit plan sponsors, who are mandated to do so.

It is through this form that the government monitors benefit plans and pension operations and investments, since it is in their interest to protect the welfare of the American people.

As a concerted effort among Pension Benefit Guaranty Corporation (PBGC), the Department of Treasury’s IRS, and the Department of Labor (DOL), the rule on filing the Form 5500 had been enforced. Since then, companies with welfare plan and 401(k) retirement plan must comply with this annually.

But the current form does not seem to be informative enough. This year, a proposal has been made to improve the Form 5500 reporting. This is to assist in the update of the current plan st

Since the announcement of the proposed changes, the government opened its communication lines and accepted comments from plan sponsors. Information on Form 5500 revisions is already being disseminated by government agencies for a successful implementation of the new form in 2019.

What are the changes to expect?

The proposal is bound to make valuable changes in the governance of benefit plans, as well as in the lives of individuals and employers. It is expected to benefit compliance with certain laws, provide a more comprehensive financial report, and cover a broader span of companies mandated to comply with Form 5500 reporting.

One of the salient features of the proposal is the addition of Schedule J. This requires employers to provide more detailed information on their benefit health plan packages and ensure compliance with the laws focused on protecting the rights and access of individuals to healthcare and welfare benefits. Those laws are the Employee Retirement Income Security Act (ERISA), Affordable Care Act, and Michelle’s Law, among others.

Another key feature of the new form is the addition of companies with welfare plans, which cover less than 100 employees, required to comply with the reporting. This aims for a wider coverage and greater transparency in the framework of group benefit plans among all plan sponsors.

What do the changes imply?

This is most advantageous for the companies that sponsor the benefit plans and the government. Their access to a large database of consumer information will help them improve the policies and plans that only aim to protect its beneficiaries.

Another advantage is for the individuals whose rights and interests are the highlight of the proposed changes. There will be extensive inquiries on the companies’ compliance with state rules on healthcare and retirement. Therefore, employers will be encouraged to offer benefit plans that are both compliant and competitive.

The disadvantages, on the other hand, are overwhelming. First, the cost of filing the Form 5500 is expected to increase approximately 5,500% more (in aggregate). This is because those companies that were previously exempted from filing will bring the numbers expected to comply from only a few thousands to 2 million.

Second, the processing, although electronic, will take more time. There will be more details required from plan sponsors such as questions on their full compliance with certain state laws and disclosure requirements.

The most apparent implication is that the change presents the government’s continued commitment to support the welfare and healthcare of its people. This is promising for most Americans that will need greater welfare benefits, health protection, and better healthcare services in the future.

The higher standards of compliance that will be enforced on more companies raise the standards of providing benefit plans in the U.S. as well. Although the reporting might pose some inefficiencies or inconveniences from the employers’ end, the consequence of non compliance is more costly. Failure to file Form 5500 on time is a fine of $2,063 daily. All these are great incentives that benefit compliance.

The healthcare reform that gave birth into improving the form 5500 aims only to reinforce the rights and give importance to health and welfare of individuals. While the changes are still in its early stages, it’s worth it to know about what the changes are and what they imply. Before the change reach its full shape, individuals and employers alike should take an active role in forming the reporting standards that will ultimately change America’s health care system.

benefit consultants groupGo ahead and request a quote or simply call us at (515) 244-2424


Comparing Forms 10-K and 5500: How Do They Differ?

Comparing Forms 10-K and 5500: How Do They Differ?

The benefit plans provided by companies and firms are regulated by the government. The government does this by assigning some of its agencies to specifically monitor pension fund performance. For public pensions, two forms are studied by the government: form 10-K and form 5500. Let us compare these two data sources and find out what distinguishes one from the other.

US benefit consulting groupThe element that these two forms have in common is that both are required by the government to be submitted annually for the purpose of assessing the performance of a company when it comes to providing employee benefits and keeping the rights of their employees protected.

Form 10-K is a report made annually to the US Securities and Exchange Commission or SEC. This report must be filed 90 days after the fiscal year ends. The nature of the report will depend on how big the company is and how long the company has been public. This form details the financial situation of a company. It also includes information about the business’s current condition. The form includes financial statements that have gone through auditing by a third party accounting firm. This form is not similar to the report given to shareholders in the form of a booklet whenever they meet to choose new directors.

The US Securities and Exchange Commission requires that disclosure sections need to be included in the form 10-K. Usually, this form can include some, if not all, the following elements:

  • Financial data. A financial summary detailing data over the past five years must be included in the form. This provides an overview of the financial performance of the firm. Pension obligations is not necessarily included in this part.
  • Results of Operations and Analysis of Financial Condition. This section can include any of the following:
    • Accounting for pensions
    • Net pension liabilities
    • Pension plan cash contributions
    • Unfunded pension obligations

If you need more information regarding pension obligations, the footnotes contained in Form 10-K may provide the information you need. When it comes to welfare plans and pension, the following information may be available in the form:

  • Benefit obligations
  • Pension funding requirements
  • Pension plan asset return rates
  • Return of assets
  • Trends in health care cost

On the other hand, form 5500 is a report also made annually to the Department of Labor, the IRS, and the Pension Benefit Guaranty Corporation.

After all of the required information has been attached to the form, the total you will submit can amount to tens of pages’ worth of documents. The form 5500 includes the following:

  • Financial information
  • Insurance information
  • Participating plan information
  • Retirement plan information
  • Service provider information
  • Single employer defined benefit plan information

The filing of this form can easily be started by checking of the website of the Department of Labor.

The difference between these two is that Form 10-K provides projections for the future, whereas form 5500 only focuses on the present. Therefore, the information provided in 10-K is significantly bigger, from the reports on pension obligation to the number of requirements to be submitted.

Form 5500 provides more information since it includes present-dated information that is not really shown in form 10-K, such as the present liability amount.

If you are wondering how to reconcile the information in these two forms, the answer is you don’t. The information provided by these two forms naturally differ because they do not serve the same function, and they do not focus at the same time frame. The government requires firms to submit different forms that are designed to provide different points of view to those who are going to be checking them, so thinking that these two forms should be the same would be wrong.

It is important to understand what each of these two forms do and which agencies look at the information. These forms are checked in order to ensure quality in benefit planning and in upholding employee rights.


Are you seeking a national leader in benefit compliance consulting?

View our Form 5500 Preparation Services

Request a quote or call us today at (515) 244-2424

Compliance Issues: What to Consider When Updating Benefit Plans

Benefits Compliance: What a company should consider when it decides to update its benefit plans?

The government annually checks whether companies and firms remain compliant with the law when it comes to how they implement their insurance policies. Agencies such as the IRS require employees and firms to submit forms that prove compliance with government guidelines. This is done not only to keep standards, but also to ensure that employee benefits are given proper attention and care.

With changes in guidelines every year, it can easily be assumed that your firm should reshape its benefit plan in order to meet those guidelines. Therefore, whether you are going to be designing a new benefit plan for a new plan year, or if you are simply going to be updating an existing plan you have, you need to know the factors that your firm must consider in order to make your benefits compliance easy. The Affordable Care Act includes specific requirements that must be met before the government deems your plan compliant with the law. Here are some of the things you need to keep in mind.

  • Fair Labor Standards Act overtime rules. The changes in the entitlement to overtime compensation can affect the benefits that an employee can receive. Therefore, as part of your benefits compliance agenda, you must ensure that your firm is ready to keep the staffing costs neutral in consideration of the changes you will make regarding the benefits your employees receive.
  • HIPAA security and electronic transactions. Double check whether you need to make any upgrades on how you safeguard the personal health information of your employees by checking the latest requirements set under the Health Insurance Portability and Accountability Act guidelines. Ensure that the vendors you coordinate with are also following the guidelines imposed by HIPAA and other related government agencies.
  • Mental health. As part of the benefits compliance process, the Department of Labor will also be checking if you comply with the requirements for mental health benefits. Your firm needs to confirm that the plan you offer meets the guidance on substance use disorders and mental health benefit coverage. When you are selecting vendors, ensure that you consider their compliance with the Addiction Equity Act and the Mental Health Parity.
  • Nondiscrimination rules and health benefits. The size of the benefits you provide your workers are monitored by government agencies such as the Department of Health and Human Services. Federal agencies continue to issue regulations which will greatly affect how you design your benefit programs. With the ACA in place, you need to make sure that your plan includes all the required health benefits prescribed by the ACA, and that it has nondiscrimination rules in place as well.
  • Strategy and reporting. You also need to double check the design of your health plan and the requirements you impose that your employees will need to comply to. Your firm must check whether the medical coverage and options you provide meet the minimum necessity. You should also check whether the price of your health benefits match standards for affordability. Make the necessary adjustments for your firm to be compliant with the ACA.
  • Wellness programs. To ensure benefits compliance, if your wellness program includes biometric screening, health risk assessment, or collects information from the employee’s spouse, you need to make sure that your program meets the regulations set up by the Equal Employment Opportunity Commission. Your program also needs to be compliant with the Genetic Information Nondiscrimination act and the Americans with Disabilities Act. You should speak to vendors to ensure that your wellness program meets the expectations of the law.

Read more about what benefits are subject to ERISA.

The earlier you start planning your benefit plan, the better it would be. Effective planning is key in passing checks and audits made by government agencies. Compliance will, aside from keeping your firm’s reputation, attract more employees and will generally improve business. Companies that offer good benefit packages are sought after by applicants due to the high costs of insurance policies, medical treatments, and medicines.


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Back To the Basics: Form 5500

Form 5500: The Basics

One of the most important government forms you need to complete to secure your retirement plan is form 5500. If you work for a company that offers either a retirement plan or a 401 (k) plan, you should be annually completing the form since the plan began to be implemented. Every year, the Pension Benefit Guaranty Corporation, the Department of labor, and the IRS check if your company is still able to protect you, and whether your plan continues to be compliant with the set regulations.

The form is always heavily scrutinized by many individuals and government offices, so knowing what it does, what it contains, and when to file it is of extreme importance.

What is Form 5500?

If you work for a firm that offers a tax qualified retirement plan such as the 401(k) or something similar, during the time you worked for that firm, you should have been filing form 5500 every year since your business started adopting the plan.

The form looks almost the same as other forms issued by the IRS; the only difference being this form is not just held by the IRS, but also by other government bodies such as the Pension Benefit Guaranty Corporation and the Department of labor. Each of these agencies have their own set goals when they look at your form, but ultimately, what they are trying to ensure is that your plan is being operated for your benefit and that it is being correctly processed every year.

  • The IRS uses the information on your form to determine your tax compliance. The IRS is the agency responsible for the regulations that allow tax benefits and retirement plans to be implemented to both workers and employers.
  • The Department of labor uses the information on your form to ensure that the plan your company is using is not breaking any rules. It is also used to make sure that the company keeps your rights protected and secure. The DOL monitors how the company operates the plan.
  • The Pension Benefit Guaranty Corporation monitors what is written on your form to determine whether the firm you work for is compliant in providing you with the benefits you ought to receive, regardless if the firm has moved on to using a new plan.

In summary, the 5500 form is used not only for law enforcement, but also for analysis. The government checks how many businesses offer retirement plans, whether workers are recipients of any type of benefit, how many large and small plans are available to people at a given time, and what new regulations may be enforced in order to improve the present situation.

What are “small” and “large” plans?

Plans that are assessed in your form are categorized as being either “large” or “small”.

If the plan had less than one hundred members on its first day of implementation, the plan is considered to be a “small” plan. Those that exceed that number are called “large” plans. It is those firms that have large plans that need to file the 5500 every year, while firms with small plans only have to complete a simpler form called the form 5500-SF.

A plan can continue to be considered small if the number of participants does not exceed 120 at the start of the new plan year. Every participant regardless of whether they are active or not are considered in the head count.

When should it be filed?

The form 5500 should be filed after the end of the plan year, on the last day of the seventh month. If you need more time, you need to file form 5558, which can extend the deadline for another two and a half months.

The form is never the same every year, and there are always changes introduced in order to ensure that it matches the needs of firms and workers today. Every year, the IRS imposes new changes to the form, and the IRS simply sends instructions to firms on what has been updated on the form.


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