Department of Labor – “Request for Information and Required Response”

URGENT COMPLIANCE BULLETIN

FOR IMMEDIATE RELEASE

Date:              May 20, 2021

From:             Benefits Compliance Consultants (info@bc2co.com)

To:                  All Employee Benefits Agents and Plan Administrators

Re:                  Department of Labor – “Request for Information and Required Response” inquiries related to Form M1 filings for MEWA’s

 

It has come to our attention that the US Department of Labor is actively reviewing Multiple Employer Welfare Arrangements (MEWAs) and is currently sending   “Request for Information with Written Response Required” notices to MEWA Administrators that have failed to file Form M1 report(s).

The DOL is requiring a 15-day written response to all notices and outlines all actions that MUST be completed within this time frame. These notices also make specific mention of the following civil action:

“If you were required to file the Form M1 and failed to do so, you may be liable to civil penalties of up to $1,644 per day pursuant to section 502(c)(5) of the Employee Income Security Act of 1974, as amended (ERISA).  The Department may take other action against you including, but not limited to, ordering you to cease and desist operations of the Plan, pursuant to ERISA section 521(a) and 29 CFR 2560.521-1.”

 

If you have received one of these notices and/or have not filed a timely Form M1 filing, please contact us at (515)244-2424 or info@bc2co.com immediately. 

Your trusted resource for comprehensive ERISA compliance,

Benefits Compliance Consultants

www.bc2co.com

Retirement Plan Compliance Guidelines You Must Know

The Employee Benefits Security Administration or EBSA is responsible for assuring that all 401k plans are in compliance with the Employee Retirement Income Security Act (ERISA). In recent years, the number of compliance audits conducted by both the IRS and the DOL has increased exponentially. It is the duty of the plan administrator to maintain, understand and ensure compliance to minimize the risk of their plan being audited. Given below is a retirement plan compliance guide that may help you to prevent any compliance issues from arising.

retirement plan compliance time

1) Reviewing Key Documents

There are three main documents that must be maintained, reviewed and retained every year at all costs. One of them is the most recent plan document that includes updated agreements. The other is the plan amendments document that includes any changes as per ERISA. The third one is the latest service agreements with TPAs. It is important for the administrator to not only review these files but also have signed copies of them.

2) Understanding the Plan Document

Every retirement plan will have a set amount of provisions that define the eligibility of participants and the benefits they can gain from it. The administrator must always go through the plan document to understand every aspect of eligibility from age requirements, service requirements to employee classification to ensure that all eligible employees get included in the plan. The document will also contain key information pertaining to the sources of compensation such as bonuses, severance pay, and taxable benefits, etc.

3) Understanding TPA Duties

Misunderstanding TPA’s duties is another reason why a retirement plan compliance issue may arise. To prevent errors from occurring, it is vital to keep a signed copy of the latest service agreements and read them fully to understand its full scope. Calculations related to employer contributions are mostly done by the TPA but some service agreements might indicate that it is the responsibility of the plan administrator to do so. Therefore, it is important to ensure that there is no confusion regarding the duties or it might lead to negligence and compliance issues in the end.

4) Adherence to Regulations

Retirement plans have a ton of rules and regulations to follow and sometimes a few of them might slip through the crack and never get enforced. For instance, most plans have a provision where employees who leave and then get rehired within a set amount of time can gain eligibility for participating in a 401k plan but it is often overlooked by a lot of companies. When it comes to an audit, even the tiniest detail will be under heavy scrutiny.

5) Ensuring Consistency of Day to Day Operations

It’s not sufficient to just have a plan document that meets all the required compliance needs. Day to day operations of the plan must be consistently upheld to all the rules and regulations as per the law. Sometimes, regulations may change before the sponsor is required to make changes to the plan. In such cases, operations might vary from the written terms of the plan. By maintaining consistency in the day to day operations of the plan, both the administrator and the sponsor can better prepare for any hurdle that may come their way.

By ensuring that there aren’t any issues when it comes to retirement plan compliance, everyone benefits, including the business owner and his/her employees. A happy workforce will always be a productive one too. We provide a number of different services such as Form 5500, ERISA compliance, benefits compliance, 401k and our specialty wrap form planning aimed at helping companies keep all their plans in accordance with the rules and regulations set by the IRS and DOL.

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ERISA’s Electronic Disclosure Rules

New Electronic Disclosure Rules Proposed by the DOL and its Details

The Department of Labor has proposed that retirement plans would need to have a new safe harbor process for the electronic delivery of participant notices. This comes as a welcome addition as the old disclosure rules were considered to be outdated by many. According to the new proposal, a retirement plan administrator can now furnish required disclosures to their plan participants and beneficiaries through electronic delivery unless the participants decide to opt-out. It is important to note that this new proposal will not apply to employee welfare benefit plans such as group health plans or disability plans.

What is the New Safe Harbor Method?

ERISA Electronic Disclosure Rules Pathway

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The new method utilizes a “notice and access” model where the plan participants and beneficiaries are kept in the loop regarding key information on their plans. This is done by giving them instructions on accessing disclosures and for requesting paper copies of them. Under the new method, you can put your fears of ending up with penalties to rest as it not only brings more convenience but transparency as well.

Old Safe Harbor Method?

Those who don’t have the ability to access documents in the electronic form can go for the 2002 safe harbor method as long as they provide affirmative consent. For employers, the old method tends to be more bothersome as they usually have to distribute the documents on paper.

New Rules for the Employers

The new proposal comes with a few pre-requisites to utilize the new method such as specifying the timing, content, delivery methods and standards for the site where the disclosures will be housed. It can only be used for participants who have an electronic address such as personal email, work email or even mobile phone numbers. As a result, there won’t be any limits to the type of device the information can be accessed on. However, according to the DOL, it is recommended that if smartphone numbers are used for the participant’s condition of employment, then the employer-provided smartphone must come with a data plan.

What Are Some of the Changes?

1) When it comes to covered persons, the new method is much broader in application than the old one as it doesn’t require affirmative consent if participants receive an electronic address from their employer.

2) Covered documents such as the summary plan description, summary annual report and pension benefits statements can be furnished electronically, only when they are required to be or due to specific events such as plan amendments.


ERISA’s Electronic Disclosure Rules

401k Benefits For Employees

401k Benefits For Employees – Building a Secure and Safe Financial Future

Saving money for future is one of the most vital things to do when you are employed. It’s not a simple task but it is a necessary one that will bear fruits when you reach your retirement age. A 401k plan is a tax qualified contribution based pension account into which a certain amount of money is put in from the employee and the employer. This amount will not be taxable as long as you don’t withdraw it prematurely. It is meant to be a retirement savings plan and therefore should not be touched ideally until you reach your retirement age.

What are some of the 401k Benefits for Employees?

1) Automatic Savings

In a 401k plan, the money will be deducted from your salary pre-tax and transferred into the 401k account every month. The most difficult part of saving money is in actually resisting the urge to spend all your money and this solves that problem very efficiently.

2) Tax Savings

Your contribution is taken before tax is levied and so your taxable income will be significantly less than what you would have to pay if you don’t have a 401k plan.

3) Better and Faster Savings

As your contributions grow without incurring any taxes, your savings can actually grow faster than a traditional investment plan in a brokerage firm or a bank.

4) Supplementing Social Security

Deciding when to draw social security is a difficult task in itself. When it is taken, you will often find that it falls quite short of the income you are used to when employed. A 401k plan can help you fill the gap better by giving you a good amount of money when you reach your retirement age.

5) Potential Loans

One of the most useful 401k benefits for employees is the ability to take loans based on special conditions for various reasons ranging from buying a house, medical expenses, education and so on. The amount of interest levied on these loans is usually lesser than traditional loans offered by banks.

Pre Mature Withdrawal of your 401k Savings

You can choose to withdraw your savings prematurely as a last resort if needed but you will have to incur penalties for doing so. If you are under the age of 59 , you might incur a 10 percent penalty along with paying taxes on the amount withdrawn which may end up being a substantial amount. The procedure for withdrawing the amount will depend on the employer as well as the type of withdrawal you go for. It is important to note that not all employers allow you to withdraw in advance. You will have to check with the H.R. department first to find out if such an option is available. A better way would be to take a loan out instead against your 401k savings as you will be able to get the amount you seek and pay it back at the same time.

If you have a 401k complaint or question, you can always contact the department of labor and file a claim on the EBSA website. Everything you need to know about the various procedures for doing so can be found there. Another place where you can find a lot of information pertaining to your retirement income is to learn more about the Employee Retirement Income Security Act (ERISA).

Form 5500 Facts

What is Form 5500?

This is an annual report that your business needs to file with the Department of Labor (DOL) to report information about your 401(k) plan operations, investments, and financial conditions. In general, if you have a retirement plan such as the 401(k) and Profit-Sharing Plans, you need to file a Form 5500 every year you have the plan. The following are important Form 5500 Facts.

Who is Required to File the ERISA Form 5500?

Any sponsor of a plan that is subject to the Employee Retirement Income Security Act (ERISA) needs to complete Form 550. These may include:

1. Pension plans
2. Severance pay, life insurance, dental, or medical plans
3. Retirement arrangements
4. Annuity arrangements
5. Stock bonus, money purchase, 401(k), or profit-sharing plans

When Should it be Filed

The deadline for filing Form 5500 is the last day of the month after the seventh month following the end of the plan year. If your plan follows a calendar year plan, you have to file the form by July 31st. Nonetheless, you can always file Form 5558, which gets you an automatic two and half month extension. However, you have to file your Form 5558 before your Form 5500 deadline.

form 5500 facts and filing How to file Form 5500 Filed

Since January 1st, 2010 the US Department of Labor requires that you file your Form 5500 through the EFAST system on https://www.efast.dol.gov/welcome.html

The Different Plans Available

One Participant Plans

The one-participant plan applies to you if you are a business owner with no employees. However, the plan can cover you and your spouse.

If you are running a one-participant plan, you could either file a Form 5500-SF or the Form 5500-EZ. Form 5500-SF needs to be filed electronically while Form 5500-EZ needs to be filled in on paper and submitted to the IRS. In some instances, you may not have to file any 5500 form when you are operating under the one-participant plan. Generally, if the assets in your plan are no more than $250,000, you may be exempted from filing.Plans with less than 100 participants.

If your plan has less than 100 participants, you will need to file Form 5500-SF through EFAST.

Plans with 100 or more participants

If you have a plan that has 100 or more participants then you have to file Form 5500 electronically.

Penalties for Non-Compliance

There are stiff penalties for compliance that may include:

1. A fine of $10,000 or imprisonment for five years or both for any person that makes false representations or false statements, or knowingly conceals or fails to disclose any fact required by ERISA.
2. A fine of $2,063 for every day the sponsor refuses or fails to file an accurate or complete report.
3. Imprisonment of up to 10 years or a fine of $100,000 or both for knowingly violating the requirements of ERISA
4. A fine of $1,000 for failing to submit an actuarial statement according to the provisions.
5. A fine of $25 every day to a maximum of $15,000 for failing to file returns for bond purchase plans by the due date, annuities, and trusts, and certain plans of deferred compensation.

Retirement plans need to file Form 5500 every year to avoid heavy penalties. As a sponsor, it is very important to file Form 5500 on time and ensure the accuracy of the data reported to avoid stiff penalties. While it is not your typical tax return, the form is an important source of data by the DOL and the IRS for identifying what plans need an audit. The time spent reviewing that information will be time well spent. Overall, both the DOL, the IRS and you as the plan sponsor will benefit from having a well-operated employee benefit plan.


Get help now with Form 5500 and benefits compliance.

Or call (515)-244-2424 for ERISA Compliance Support – Form 5500 Preparation & 401K Filing Services

Benefits Compliance Trends in 2019

We are past the midway point of the new year, with the job market experiencing a few adjustments concerning benefits. Given the advancement of the digital age and the need for organizations to cut down costs in every way possible, change is a constant expectation in the modern workplace. In particular, the following benefits compliance trends are catching on:

1) Revision of umbrella covers to personal packages
Employer-sponsored group coverage has long been the general rule of thumb for companies, but now organizations are switching to an alternative tactic. Employees instead propose individual plans as opposed to securing a blanket offer as has typically been the case. Moreover, with companies preferring the path of high-deductible health plans (HDHP), there’s also heightened attention on tax-advantaged health savings accounts or HSAs.

2) Telemedicine is becoming popular
The National Business Group on Health revealed findings pointing to rising healthcare costs, which are on their way to $15,000 per head. In an attempt to ensure prices don’t spiral out of control, healthcare providers are utilizing telemedicine to reduce in-person doctor visits, which are significantly more expensive. What’s more, insurers are encouraging consumers to seek out generic alternatives to costly prescription while they are also offering discount cards after negotiations with manufactures.

3) More comprehensive analysis
In previous years, employers broadly grouped workers in categories such as generation Z, X, and millennial’s with a view to targeted benefits offerings. However, there has been a change in terms of employee data tracking and recording. At the moment, employers are taking note of individual employee preferences while also keeping an eye on benefits usage. VOIs, anonymous surveys, and email-tracking are some of the new ways organizations are leveraging personal data to come up with smart solutions.

4) Emotional health is a top priority
Many employers have taken measures to safeguard the mental health of those under their payroll. Some companies, for instance, have opted for virtual and onsite counseling to combat mental, behavioral, and emotional complications such as addiction, anxiety, and stress. Alternatively, others are prioritizing network expansion while it’s becoming commonplace for mental health benefits and employee assistance programs to intertwine.

5) Employers’ benefits are becoming more family-friendly
Local and state regulations aside, it’s also in the interest of employers to improve or put in place paid-parent-leave plans with complimentary perks like paid caregiver leaves. Doing so proves necessary at a time when society is rife with changing expectations, and the fierce war for talent is only growing fiercer. The dwindling rates of unemployment have also seen to this with many companies striving to go the extra mile to prove more appealing. On the flip side, employees are also now taking a keener interest in benefits as opposed to salaries.

Companies have been shifting and stretching the goalposts of benefits compliance in 2019, and these five are some of the most significant changes. There’s still a long way to go until the end of the year, and you can be sure of more revisions in the coming months both from the insurer and the employer.


Does your business have benefits compliance questions or Form 5500 needs?

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Technology Compliance Benefits Businesses

Compliance benefits businesses in many ways.

It is obvious we live in a world where technology has now become part of our daily lives. Technology has come to change so many things that were hard to accomplish to be easy tasks completed in a matter of minutes.

Technology has made life quite easy in all aspects not just in the business world. Communication has been enhanced greatly between people who are miles away but they can now see each other as they converse. Information from the head company will reach its branches in a short span of time thanks to technology.

However, there is no good thing that does not have its share of downfalls. Technology too has its limitations. Sometimes it may not be in compliance with the set ethics and standards. It has drastic setbacks in as much as it has made work much easier. In this article, you are going to learn about the benefits of technology in the compliance industry and also the disadvantages of technology as far as compliance is concerned.

Merits of Compliance Technology

It is through technology that compliance programs are able to reduce risk, enhance flexibility, increase efficiency and improve on their performance.

1. Reduce Risk

Your business requires you to roll out a risk-based compliance structure. Technology is known to manage risks more effectively. If you have sufficient knowledge on your compliance program as a complete loop then you have better chances of knowing how to handle when risks occur before they become catastrophic problems.

This will lead to an effective program and thus reduces instances of potential lawsuits. It ensures you reduce your expenses on insurance premiums. Risky activities will now have less impact on the organization’s core business.

Accessing real-time data enables you to find weaknesses and upcoming issues in your program. You will therefore be able to deal with that problem before it grows to a major disaster and hence continuance improvement of your program.

2. Enhance Flexibility

This is another benefits compliance of technology. Have a look back at the time when there were no electrical gadgets like phones and computers. Everything was just very slow and even misquoted. Information did not reach people at the right time.

But look at the world we live in today. Everything is so swift and accurate just like what is needed for the compliance programs. They are constantly changing and therefore people need to adopt real quick. The program ought to be scalable, changeable and flexible to help your employees get updated on any issues and also give them a chance to show their reaction.
As companies grow and open up new branches in other areas, they also need to extend their compliance programs to these new entities to ensure benefits compliance is achieved as you run the program. This pushes the companies to move the compliance technology from desktop and static storage to cloud-based interfaces that are also mobile-friendly.

3. Increase Efficiency

An efficient compliance program needs to have a backbone. These are the driving factors of the same. They are normally the controls, procedures, and policies. The ancient types of programs did not make things run efficiently but technology has really eased the compliance programs and made it an easy task for people.
It becomes easier to develop and upgrade that program, to refresh, review and even update it.

4. Improve Performance

A centralized type of compliance program is more efficient. In the old days, technology was not used as of now where business is keeping the program centralized and control from only one point. This definitely increases your team performance and the program as a whole.
Integrated platforms allow the teams in the organization to link their data together and get to know how a part of your program affects the other.

compliance benefits

Technology Setbacks

The major downfall of technology is they are prone to attack. This is especially if we are talking about electronic gadgets such as computers. They can be attacked by harmful programs that will erase all that is stored on the computer.

These digital tools also use electricity for them to function. In case you do not have back-up generators to use when electricity is lost then the technology is useless at that instance.
Some believe technology have made humans become lazy. Since most of these tasks are being done by machines you find that if the technology fails to work then probably no work that day. Whereas it could just be a simple task but humans are now used to the machine so they feel they cannot do it. Others might believe that the machines do more work in one day than humans do in a month and does a better job. Either way, technology compliance benefits businesses.

We make the process simple. We are ERISA compliance specialists.

Phone: (515)-244-2424

E-Mail: info@bc2co.com

DOL Enforcement Is Up And Guidance Is Down

Did you know that DOL enforcement activities were up considerably at the Department of Labor last monetary year, especially with respect to missing out on individuals, however the lack of additional support continues to be a discomfort factor for the retirement sector, according to attorneys who concentrate on ERISA-related matters.

The DOL did not react to concerns regarding whether it altered the way it determines its enforcement numbers.

” It is clear that (Secretary) Alexander Acosta’s DOL is proceeding for the enforcement priorities and general aggressive position that was begun under the Obama administration,” stated Thomas E. Clark Jr., a St. Louis-based partner with The Wagner Law Group. “We’re seeing that shown at a macro degree with these numbers and also in our method we’re likewise seeing that at a mini degree in defending plan sponsors as well as company in DOL examinations.”

For plan sponsors who are not actively concentrating on their fiduciary obligations and also just how ideal to meet them, the enforcement statistics ought to get their focus, claimed Carol I. Buckmann, companion at law office Cohen & Buckmann PC in New York. “They go to risk,” she added.

The DOL did not reply to inquiries as to whether it changed the method it computes its enforcement numbers.DOL enforcement

Under the current management, the DOL has filed 2 consultatory viewpoints in 27 months. In the proceeding 8 years under President Barack Obama, 28 advising opinions were released– yet simply four in the first 2 years. Under President George W. Bush, the DOL submitted 102 consultatory viewpoints in 8 years, including 23 in the first 2 years.

The overall uptick in enforcement is a trend Ms. Buckmann expects to continue. “I assume that’s amazed some individuals since on the regulatory side under the Trump management we’ve had proposals that have actually maybe loosened up several of the rules … however on the enforcement side we have a different picture,” she said. “That durable enforcement is hosting likely to continue in 2019 and people require to be knowledgeable about that.”

EBSA’s Voluntary Fiduciary Correction Program— which permits planning authorities that have determined specified ERISA offenses to correct the breaches as well as willingly report the offenses to EBSA without coming to be the topic of an enforcement activity– received 1,414 applications in 2018, up from 1,303 the year prior.

Attorneys claimed their customers are trying to find assistance on issues like missing participants and staff member stock possession strategies, which has held true for a number of years.

The EBSA recouped more than $1.6 billion for straight settlements to plans, individuals as well as recipient’s last, consisting of $1.1 billion in enforcement actions, according to data on the DOL site previously this year. The previous year, it recorded $1.1 billion, including $682 million from enforcement activities. Of note, its Terminated Vested Participant Project, which incorporates missing out on individuals, recouped $807.7 million for individuals in defined advantage plans in 2018, up from $326.7 million the year prior, a 147% increase.

Are You ERISA Compliant? Hire a Consultant to Provide Guidance

ERISA, which stands for Employee Retirement Income Security Act is a federal law that safeguards retirement plans such as 401ks and health and welfare benefit plans for private employers. The law has been amended many times since its inception in 1974 in order to provide wider benefits for participants and beneficiaries. The law is administered by the Department of Labor and while violation can have serious consequences in the way of penalties imposed by the DOL, participants and beneficiaries can also launch lawsuits against employers who they feel are not ERISA compliant.

Any employer who maintains welfare benefits plans for employees is subject to this law. This includes corporations, partnerships, limited liability companies, sole proprietorships and nonprofit organizations. The size of the employer doesn’t matter – so long as the employees are subject to benefits the employer is subject to ERISA compliance. There are, however, a couple of exemptions:

• Benefits plans that are maintained by government employers are not subject to ERISA and that includes local, state and federal.

• Benefits plans that are maintained by religious organizations are also exempt.

A small employer who wants to be exempt would have to find a way to fit in either of these two categories.

Which benefits are covered by ERISA compliance?

There are many of them and that is why many employers would rather hire a consultant to deal with this specific issue. Compliance can be tricky and confusing and sometimes employers find themselves afoul of the law through no fault of their own. The benefits that are covered include:

• Medical, hospital and surgical benefits

• Dental benefits

• Vision benefits

• Prescription drug benefits

• Health reimbursement benefits

• Health flexible spending accounts

• Group insurance benefits

• Accidental death and dismemberment

• Death benefits (not life insurance)

• Wellness programs

• Employee assistance plans

• Short term and long term disability benefits

• Disease specific benefits

There are certain benefits that are not covered under ERISA compliance:

• Adoption assistance plans

• Section 125 premium only plans

• Commuting benefits

• Dependent care assistance programs

• Health saving accounts

• Pet insurance

• Financial retirement planning programs

• Health and exercise club memberships

• Liability insurance plans

• Professional development classes

• Scholarship programs

• Tuition reimbursement

• Workman’s compensation as provided by state law

As is often the case with the law, in each of these categories there are clauses and sub-clauses that can be very confusing to a layman. Even for those who understand the law navigating the issue can be a time consuming process that takes them away from other more important duties in the workplace. That is why it is such a good idea to hire a consultant. An ERISA compliance consultant understands what it means to be ERISA complaint and ensures that all clients are doing as required by law.

How do you choose an ERISA compliance consultant?

There are many agencies that claim to help employers with ERISA compliance but you should be careful when you are choosing. You should be looking for a consultant who has guaranteed experience in this area – they should be able to show you proof of some of their work. Ideally, a consultant who has been around for at least 10 years is a good idea because in that time they will have gathered the necessary experience to ensure that their clients are ERISA compliant. They also know the loopholes that the government can use to come after you and they will help you plug them.

A good consultant will be ready with advice and play a preventative rather than a curative role, helping you make sure that you have complied with all federal requirements.

Once you hire an ERISA consultant like us you will be doing to ensure that your employees get their benefits as required by law.


Are You ERISA Complaint? Hire a Consultant Like Us.

 

Is Your Business ERISA Compliant? How To Make Sure Your Small Business Is In Compliance

‘Compliance’ is a term that is commonly heard in the business world. Having a business that is in compliance is often a goal for many small businesses. However, if you are wondering is your business ERISA compliant, it cannot simply be a goal. In fact, ERISA non-compliance is the law, and stiff penalties await any business that fails to follow the law.

The ERISA, or the Employee Retirement Income Security Act, is a Federal law that stipulates specific minimum standards for welfare plans, health plans and retirement plans that qualify. Although this sounds simple enough at first glance, right beneath the surface lies the confusion and complexity of the law that often stops small business owners in their tracks.

The complexity of the law is becoming even more evident, especially with the passing of certain legislation such as the PPACA, or Patient Protection And Affordable Care Act. This is also known as the Health Care Reform Act. The PPACA has a direct impact on health plans that are covered by ERISA.

The Department of Labor and the Internal Revenue Service are two Federal agencies that not only oversee these types of plans but also work to ensure the plans are enforced. These agencies are also paying very close attention to sponsors, those who are compliant and those who are not. Between 2008 and 2010, over 70 percent of these retirement plans were audited by the DoL (Department of Labor), and the penalties averaged over $400,000 per plan.

So, with all of this information, it can be nerve-wracking for business owners to know is your business ERISA compliant. Fortunately, there are several things that can be done to make sure businesses are indeed compliant.

Plan Documents

All plan documents have to be compliant with the regulations and laws. Any amendments made to the documents have to be signed by the appropriate parties wherever applicable. All plan operations are also required to be in compliance.

Having A Summary Plan Description And Summary Of Benefits In Place

A summary plan description, or SPD, is information that informs participants about all of the terms and conditions of the plan. Some of the information included is:

Obligations
Rights
Benefits

These SPDs are typically given to participants, and ERISA compliance requires that these documents are automatically sent to participants within a certain time frame.

On the other hand, an SBC (summary of benefits and coverage) provides participants with general information and they also allow participants the opportunity to compare different health plans before choosing one.

Employers can choose to integrate these two documents, but failure to provide one or the other is an ERISA violation that can result in hefty fines.

Health Plans Compliant With ERISA

Almost all group health plans should have SPD. These types of plans include all key medical benefits, but also include plans for dental, wellness, and vision. It is important to remember that the rules for ERISA apply to more than just the main health benefits, so be sure you account for all of them.

Responsibility Of Plan Administrator
ERISA compliance is the job of the plan administrator. This can be a designated person within the organization, or it can be the employer (sponsor of the plan). The plan administrator must be named in the SPD (summary plan description), and this person is not able to avoid liability for any SPDs by delegating tasks to other people in the organization.

Also, keep in mind that most TPAs (third-party administrators) are not usually designated to be plan administrators of ERISAs. However, they may assist with the distribution and drafting of a summary plan description if they are under contract.

Insurers are not responsible for creating SPDs for ERISAs either. They may decide to assist with benefit descriptions or certificates of coverage, but these items are not considered SPDs.

So, is your business ERISA compliant? These regulations can be difficult to understand, but by working with compliance professionals and resources, you will avoid making costly mistakes.

Do not hesitate to contact us if you or a business is in need of ERISA compliance services. We will provide best service for best price. Form 5500 Champions!

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