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.


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

A Summary Plan Description Overview: Do You Need One?

A summary plan description is what your company will use to communicate the plans rights as well as the obligations of the beneficiaries as well as the participants.

It is a summary of all the materials that are found in the plan document, and it should be in such a way that it is completely understandable to the average participant or beneficiary of the said employer, that is you. It should have some particular requirements so that it can qualify to be described as a summary plan description for your company. Such things are such as the name of the plan which is imperative to clearly outline what it is all about.

The name of the sponsor or that is you as the employer. Another important aspect of all this is the brief description of the benefits that the employee will receive. This is extremely of high importance that this is made clear as it is what the plan is all about. This can be benefits such as life, medical disability as well as dental. Another vital part is the type of plan description which should define whether the plan is administered by you the employer, or the insurer or a contract. Another part is important to remember is that the eligibility terms need to be outlined too.

The employees’ eligible classes, waiting a period of the employment and effect date of participation and much more are presented clearly. The plan contributions sources need to be described too, whether they are employee or employer contributions as well as the calculation method. These and many more other things need to be part of the SPD so that your company can be in a position to operate efficiently.

Your company needs this plan to be able to make sure that the employees are well taken care of in case of anything that is related to their health, life, and so many other things. This is a complicated plan that needs the right kind of professionals so that it can be prepared by both the employer and the employee.

SPD summary plan description

To ensure that both the parties are satisfied, some guidelines need to be followed to the letter so that it will emerge as a great plan that both will be for. You can not run a company without this scheme for your employees, so you need it.

The government requires that you run your company with this plan in hand so that if anything should happen to your employees, they will already be covered. This is why the qualified professionals need to handle SPD Summary Plan Description, and this is where we come in. We will help you structure this plan in a meticulous way that will enhance the effectiveness of the employees in the company. The kind of way that we will be able to prepare this for you will be in such a way that it will be accepted by the employees as well.

Our vast experience will guarantee that you do get what you are looking for as we have worked with similar companies before.

Click Request a Quote in the menu or call us at (515) 244-2424


Why You Should Ask Our Company to Prepare Form 5500 on Your Behalf

If you have been looking for a top benefits consultant group to work with you on DOL Form 5500 preparation services, we are ready to work.

Simply call us at (515) 244-2424

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Are you aware that Form 5500 was jointly developed by the Department of Labor, the Pension Benefit-Guaranty Corporation and the Internal Revenue Service to enable citizens conveniently fulfill the annual reporting obligations under Titles I and IV of ERISA as well as the IR (Internal Revenue) Code?

If you seek our services, we shall enable you understand that Form 5500 is a vital compliance, disclosure and research tool for the DOL (Department of Labor). We shall also help you understand that the form is an important disclosure tool for plan beneficiaries and participants as well as a valuable source of info and data for utilization by the private sector, other federal agencies and Congress in assessing the benefits, policies, tax obligations and economic trends of employees.

We take cognizance of the fact that Form 5500 prep is part of the general disclosure and reporting framework of ERISA, and is meant to give assurance that the operation and management of employee benefits plans complies with the prescribed standards, and participants, regulators as well as beneficiaries have access to, and are provided with enough information to safeguard the benefits and rights of beneficiaries as well as participants under the employee benefits plans.

Compliance with the electronic filing requirement

If you seek the services provided by our company, we’ll explain to you how you can comply with the electronic filing requirement, and why you should comply.

We are aware that since 1st January 2010, it was declared that completion and submission of Form 5500 Employee Benefit Plan Reports/ Annual Returns, Form 5500 SF Small-Employee Benefits Plan Reports/ Short-Form Annual Returns as well as other requisite attachments and schedules must be done electronically using third party software approved by EFAST2, and/or through IFILE.

We are also aware that specific 5500 EZ filers are allowed to electronically submit Form 5500 SF using EFAST2, instead of submitting hard copies to the IRS.

prepare form 5500


Our employees clearly understand everything that pertains to Form 5500, including all the schedules. Therefore, they’ll help you understand difficult concepts. If you come to us, you can be assured that your Form 5500 will be prepared by employees who are qualified, knowledgeable and experienced.

Our employees are familiar with the following; Schedule A (Insurance Information), Schedule C (Information on Service Provider), Schedule D (Participating Plan Information/ DFE), Schedule G (Financial Transactions) and Schedule H (Financial Information).

Additionally, our employees have knowledge of Schedule I (Financial Information for Small Plans), Schedule MB (Multi-Employer Defined Benefits Plan & Certain Money Purchase Schedule Actuarial Information), Schedule R (Retirement Plan Information) as well as Schedule SB (Single Employer Benefit-Plan Actuarial Information).

For these reasons, if you ask us to prepare the Form 5500 for you, you’ll be assured of getting value for money.

Dol Form 5500 Search

There are many reasons why you should hire us to take care of any problem that pertains to the preparation of Form 5500

We have the capacity to visit the Department of Labor’s website and conduct a Dol Form 5500 search to ascertain if your Form 5500 was received by EFAST2. We shall review the forms, attachments and schedules that you submitted to establish if everything was done correctly.

Do you know that if the documents you submitted are uploaded on the Department of Labor’s website, it doesn’t necessarily mean that the DOL (Department of Labor), Internal Revenue Service and Pension Benefit-Guaranty Corporation will automatically accept them? That’s why you should let us carry out a Dol Form 5500 Search on the DOL’s website to establish if you met all the requirements.

Why you should ask us to prepare your Form 5500 (employee benefit plan report/ annual return)

We shall prepare the Form 5500 on your behalf to report your financial condition, operations and investments. Why shall then advise you how to electronically file it via EFAST2 before the deadline (31st July for a 12 month plan).

When the government (through the three aforementioned departments) asked everyone to shift to the electronic filing system, and the departments made several changes to Form 5500, many didn’t know what to submit for plan years before the current year, and how to alter prior year filings. If you come to us for assistance, we shall enable you understand the right schedules as well as the right version of Form 5500 to use.

We shall enlighten you on why you should never, under any circumstances, electronically submit any form (such as Schedule SSA) that contains information about deferred or separated participants to the DOL (Department of Labor). We shall explain to you why such information ought to be separately submitted to the IRS.

What is a Summary Plan Description And Do We Need One For Our Business?

The federal law that governs group life, private pension, and health plans which is also known as The Employee Retirement Income Security Act (ERISA), requires that plan participants receive a document known as a summary plan description (“SPD”). Two departments of labor must draft SPD, and it doesn’t necessary has to be referred to as “The Summary Plan Description.”

Contents in the Summary Plan Description.
The Summary Plan Description is a detailed document that informs plan participants about how the plan is managed and how it operates. Among other things, the SPD must clearly identify in easily understood language the following items:
1-A description or summary of the benefits.
2-The plan name, sponsor, and administration.
3-Funding mechanisms.
4-Participation and qualification guidelines.
5-Calculation methods for service and benefits.
6-Benefit vesting schedules.
7-Benefit payment procedures and timing.
8-Claims submission process.
9-Claims appeal process.
10-Address for service of legal process.
11- Circumstances that may result in ineligibility or a denial of benefits.
12- Technical notices and a report of participants’ in the ERISA.
13- Any questions that any member may have after reading the SDP can only be only answered by contacting the plan manager.

SPD Summary Plan Description

Summary Plan Description will be provided when:
Every plan manager must provide a copy of the SPD to members in the following circumstances:
1-When a new plan takes effect.
2-When an employee becomes eligible to participate in a plan.
3-Upon written request of a plan participant or beneficiary.

Summary Plan Description Exceptions.
Employer-provided daycare, highly compensated employees and welfare plans for management are exempt from the Summary Plan Description requirement. There are no exemptions from the Summary Plan Description requirement for small plans covering fewer than 100 participants.

How Often Must a Summary Plan Description be updated?
1-If a plan is modified or amended within a five-year period, a new Summary Plan description must be distributed to the members. In case the plan has not be changed, the original SPD must be distributed to plan participants every ten years.
2-A “summary of material modifications” may also be used to notify plan participants of a significant plan change.

What Are Common Summary Plan Description Errors that Can Result in ERISA Litigation?
1-Administration disputes or errors that may come up in ERISA litigation include but are not limited to.
2-Failure to follow the procedures described in the SPD.
3-Conflicts between the SPD and any underlying plan document which it describes or summarizes.
4-Failure to clearly disclose situations that may result in forfeitures, benefits reduction, or exclusions.
5-Failure to provide plan documents promptly.

Despite the amount of information contained in your Summary Plan Description, it should be written in a format that is simple to read. Just like with any piece of business writing, it is important to craft your business plan with your expected readers in mind. This is because bankers, investors, and other busy professionals who will read your business plan will not have time to read a tedious document with long-winded paragraphs and large blocks of text.

Overall, Employee Retirement Income Security Act (ERISA) provides clearly proscribed procedures that must be closely followed by plan administrators and sponsors. Questions about ERISA compliance should be directed to an attorney experienced in ERISA matters.

Get in touch with our company for the best Summary plan description.

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Important Deadlines for Year-End Benefit Plan

If you want to be careful about the compliance dates for health and retirement plan then this write-up is for you. The time to plan for several employees benefits plans also ends with the end of a calendar year. The employers have to work a lot in the following months while complying between annual deadlines and the inclusion of latest regulations and laws. Brief benefit plan description for some of the effective dates and deadlines is provided here under for your help in this regard.

Don’t get caught? Read more on benefit plan penalties.

Deadlines for Retirement Plan

30th September, 2016

Date of provision of SAR or Summary Annual Report to the contributors and beneficiaries by the administrator of the plan, related to previous year of planning.

Between 3rd October 2016 and 1st December 2016

Date of provision safe harbor notices to the participants and beneficiaries by Plan Administrators, as applicable, for the planning year 2017, if the plan uses safe harbor ACP/ADP testing. These notices may include:

Notice of arrangement of eligible automatic contribution

Notice of arrangement of qualified automatic contribution

Notice of alternative of qualified default investment

Notice of arrangement of automatic contribution

17th October, 2016

Date of filing the 2015 Form 5500 for your calendar year plan, if you have filed an extension on or before 31st July, 2016.

14th November, 2016

Date of provision of benefit statements for the 4th quarter to the participants in their directed plan and the disclosure of the due quarterly fee, under the rule, should also be done in that statement.

31st December, 2016

Among many deadlines at the end of year, the two most important include:

Deadline for any discretionary amendments generally applied during the year of plan

Deadline for required Minimum Distributions due to participants

January 2017

You must provide the census data of testing without any discrimination to the TPA or Third Party Administrator in this first month of the year.

Deadlines for welfare and health plan

30th September, 2016

The participants and beneficiaries must get the SAR from the administrator of the plan for the previous year

12th October, 2016

Date of conducting the first yearly solicitation of the workers, if you are ALE and missed Taxpayer Identification Numbers on the 2015 ACA ALE reporting due to non-provision of the SSNs.

15th October, 2016

Date of provision of notice of Medicare Creditable Coverage to the eligible individuals for Medicare, receiving coverage

17th October, 2016

Date of filing the 2015 Form 5500 if your plan of retirement is on a calendar year and an extension request was filed by 31st July, 2016.

1st November, 2016

Open enrollment for Exchange/Marketplace starts. The start and ending dates of open enrollments should be fixed and enrollment material like the synopsis of Benefits and Coverage should be prepared and distributed by the administrator of the plan by this date.

15th November, 2016

Date of submission of the form for Transitional Reinsurance Program and selection of payment schedule. Date of payment of second installment if opted to pay the fee in two installments.

15th December, 2016

Date of enrolment of individuals in exchange or Marketplace coverage to be effective from 1st January, 2017, after the end of coverage for 2016.

31st December, 2016

Date of provision of notices under the act for Women’s Health and Cancer Rights (WHCRA) and program for Children’s Health Insurance (CHIP) by Plan Administrator along with the materials of annual open enrollment. The model of these notices will be available on the websites of WHCRA and CHIP.

1st January, 2017

Date for the employers to ensure obedience of section 1557 of the ACA for sponsoring wellness programs or health plans and receiving federal financial assistance for heath benefit programs for their employees. Along with it they will have to ensure the absence of any discrimination based on sex, color, national origin, disability, age and disability along with a special focus on the gender identity, sex stereotyping and pregnancy based discrimination.

This section also covers the provision of free language assistance services minimum to the top 15 unskilled English speaking individuals doing business or living in the state.

It is also the date to apply for the final rules of wellness program. These rules offer restrictions on financial incentives and the program should be voluntary and designed to reasonably prevent disease or promote health, especially in ht programs of tobacco cessation, instead of denying the coverage based on non-participation. The review must be completed before this date is no program is reviewed for the compliance of these rules.

31st January, 2017

Date of provision of IRS Form 1095-C to the full-time employees of ALE to offer coverage of health plan for a group. The employers should not wait for the extensions of IRS like last year, as they have to persuade the report to ACA for the second time only.

Need assistance or help with any of these deadlines? Contact us by phone today at:


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Most of the employers and employees suffer a great deal when it comes to benefits such as pension plan and health. This challenge often occurs in a situation whereby one does not know his or her rights as an employer and much worse as an employee. The lucky lot that gets their (SPD) Summary Plan Description are basically participants in various retirement system such as “public employee retirement systems (PERS).

SPD Summary Plan DescriptionAs the saying goes “When the sun goes down, do not cry, you may not be able to see the stars.” There is no need for you to be worried anymore since this article is going to drive you in understanding the primary way of informing or rather communicating the benefits of summary plan description (SPD).

Summary plan description (SPD), as defined by DOL, is a primary vehicle that offers information to participants and the one benefiting (beneficiaries) about their plan and how it works. Obligations, benefits and rights of a person are always under the SPD policy. The plan is written for a certain number of participants, and it is sufficiently and efficiently comprehensive to explain the benefits of the covered persons.

The plan administrator always provided the SPDs. Note that all the benefits such as pension plan, all health; medical, dental just to mention but a few, of every employee being the primary requirement in the scheme. Small programs under Form 5500 are an exemption, unlike SPD requirement where the small plan has no exemption. Title I of ERISA makes the church and governmental plans to be exempt because they differ with the Summary Plan Description requirements.

Under ERISA section 104(b) (4), even though the plan does not cover the participants and the beneficiaries, they have a right to receive a copy of the latest SPD after sending a request to the administrator in the form of writing. For every participant covered it is his/her right to receive the SPD from the employer.

Anytime an employer wants to distribute the SPD he should consider the following facts;

1. An employee should not pay a single penny or fee for the SPD
2. In case the employer decides to post the SPD on the company’s or organization’s website, he or she should communicate to his/her employees.
3. The employer should ensure that the employees have the ability to access the SPD in the electronic platform both efficiently as well as with ease.

There are several factors to include and consider in the Summary Plan Description. This is according to Federal Register 29 CFR 2520.102-3. Some of the key factors that must be considered include:

1. According to DOL regulations and ERISA section 102, it requires the following to appear on the SPD;
Plan’s name;
Address of the employer, especially in the case of one employer plan.
Employer identification number (EIN) that has been allocated by the IRS.
Plan sponsor needs to assign a policy number to the project.
The category of the welfare scheme.
The category of administration of the project.
ERISA section 3(16) the name, business address and telephone number.
If the plan has a trust, it should contain each trustee name, title and physical address of the company..
The name and address of the agent in charge of the legal process.
The agreement and the method of obtaining the copy of the agreement presented in a manner of a statement.
The expiry date of the plan and the basis the plan such as fiscal-year basis.

2. Terms and conditions for participation should also be neatly and clearly provided in a statement.

3. A detailed description of the plan.

4. A statement that clearly explains the rules and regulations as well as the penalties.

5. Detailed report on termination and amendment of the plan.

6. Detailed report on circumstances on the program that may lead to the recovery of benefits.

7. Confidentiality in contributions to the SPD plan.

8. A complete statement informing the rights of the beneficiaries and participants according to ERISA regulations.

9. A clear description to react to benefit claims and appealing benefit denials.

Every company, organization, institution as well as firm needs the embracement of having an SPD, Summary Plan Description. It enhances communication and guarantees a top niche of well prepared information to all the participants.

If you have questions or believe you need a summary plan description (SPD), it is never too late to make things right, get yours today with Benefits Compliance Consultants Inc.

ERISA Wrap Plan Forms

The Employee Retirement Income Security Act of 1974 (ERISA) is an American statute that establishes minimum standards for pension plans in the private sector. Additionally, it provides rules for income tax effects on transactions linked to employee benefits. Enforced by the Department of Labor and the Department of the Treasury, ERISA was created to protect employee benefit plan participants and their beneficiaries by requiring the full disclosure of financial details of the plans by employers. Codes of action for fiduciaries and access to federal courts are also required under the Act.

If you are the employee of a private-sector company, chances are you are affected by ERISA. You may have heard the name before, and you may even be familiar with what it is and how it works. However, many employees who are affected by it every day are still unaware of how it works and what it does for you. Even business owners have questions and need help with its compliance.

There are two types of wrap documents. The first is called a mega-wrap document, which has two purposes. The first purpose of the mega-wrap document is to wrap the required ERISA language around a carrier’s certificate of coverage. The second objective of the mega-wrap document is to combine or bundle many employer-sponsored plans into a single plan. The main reason that an employer would want to combine multiple plans into a single plan is that it simplifies their Form 5500 filing. If the company is large and has several separate plans subject to filing, it has to file multiple Forms 5500. If the employer uses a mega-wrap document to combine them into one plan, it only presents a single Form 5500. However, there are other considerations with using a mega-wrap document. If an employer is close to 100 participants on one or more plans, the employer may not want to combine plans into a single plan, because it may have to file a Form 5500 for a plan that would otherwise not be subject to filing.

Another consideration with using mega-wrap documents is about HIPAA. Fully insured plans are exempt from many of HIPAA’s privacy and security requirements. If a plan sponsor uses a mega-wrap document to combine a fully insured plan with a self-funded plan, the sponsor would have to comply with HIPAA’s full measure of requirements for all of their plans, including the fully insured plans that would otherwise be partially exempt.

The second type of wrap document is used solely to wrap the required ERISA language around a single policy or plan. This would be utilized by a fully insured client that only wants to wrap the ERISA language around a medical certificate of coverage (or dental, vision, disability, life). Carriers often include state-mandated provisions regarding coverage, but do not always include the required federal ERISA requirements. Both a wrap and a mega-wrap document may be useful, depending on whether the plan has multiple benefits it wishes to bundle.


Based on the above, while carrier contracts, policies, and certificate booklets may function as the written plan document, such documents will usually not include required ERISA language and specifics about the plan itself. When this happens, adding a wrap document or mega-wrap document will be necessary for compliance with the written plan document and SPD requirements under ERISA.

Do you need a wrap plan services solution?

DOL Increases Many Employee Benefit Plan Penalties

The DOL has issued controls that expand the common fiscal punishments for an extensive variety of advantage related infringement. Perceiving that numerous punishments were turning out to be less powerful as obstructions because the punishment sums had not kept pace with expansion, Congress sanctioned enactment in 2015 requiring an underlying “get up to speed” acclimation to determine punishment sums, trailed by yearly modification. These directions set up the makeup for lost time sums. Future alterations will be made by January 15 of every year, beginning in 2017.

Here are highlights of the progressions:

Structure 5500. The greatest punishment for neglecting to record Form 5500 (which must be documented by most ERISA arrangements) will increment from $1,100 to $2,063 every day that the Form 5500 is late.

Group Health Plans. The greatest punishment for neglecting to give the outline of advantages and scope (SBC) required under social insurance change will increment from $1,000 to $1,087 per disappointment. Infringement of the Genetic Information Nondiscrimination Act (GINA, for example, building up qualification rules taking into hereditary account data or asking for hereditary data for endorsing purposes, may bring about punishments of $110 per member every day, up from $100. Most extreme punishments identifying with divulgences in regards to the accessibility of Medicaid or CHIP help, including the inability to unveil to a state, on solicitation, significant data about the business’ arrangement, will likewise increment from $100 to $110 every day.Health plans often have limited resources to detect and protect itself against such fraud. The HBSP is expanded to include criminal cases aimed at fraud on self-funded health plans by medical providers.

401(k) Plans. For arrangements with programmed commitment game plans, punishments for inability to give the required ERISA § 514(e) appropriation notification to members will increase from $1,000 to $1,632 every day. Punishments for neglecting to give power outage sees (required ahead of time of specific periods amid which members may not change their ventures or take advances or disseminations), or notification of enhancement rights will increment from $100 to $131 every day. Also, the greatest punishment for inability to agree to the ERISA § 209(b) record-keeping and reporting prerequisites will increment from $11 to $28 per worker.

Various Employer Welfare Arrangements (MEWAs). Punishments for inability to meet appropriate recording prerequisites, which incorporate yearly Form M-1 filings and filings upon start, will increment from $1,100 to $1,502.In addition, the HBSP continues EBSA’s long-standing efforts to seek out and shut down abusive MEWAs and to proactively identify known fraudulent MEWA operators to ensure they do not terminate one MEWA just to open another in a different state. To assist in these efforts, ACA authorizes the Secretary of Labor to immediately issue a cease and desist order when fraud is apparent. Final regulations, which became effective on April 1, 2013, established policies and procedures for implementation of the cease and desist and summary seizure rules.

Different punishments expanded by the controls incorporate those for inability to give certain data asked for by the DOL, disappointments not remedied inside indicated eras, and characterized advantage arrangement consistence disappointments. The expansions apply to punishments surveyed after August 1, 2016, as for infringement happening after November 2, 2015. Punishment evaluations made before August 1, 2016 (counting those identifying with infringement after November 2, 2015) and appraisals whenever identifying with infringement before November 2, 2015 will mirror the lower pre-conformity sums.

EBIA Comment: These progressions influence an extensive variety of consistence issues. (The directions additionally incorporate punishment increments for infringement of different laws under the DOL’s ward.) Keep as a main priority that not all infringement will offer ascent to the most elevated allowed punishment—for instance, DOL programs intended to urge Form 5500 documenting to take into consideration lower punishments in specific circumstances.

Note additionally that the DOL has not expanded the punishment for inability to outfit certain data asked for by members or recipients under ERISA § 502(c)(1). For more data, see EBIA’s ERISA Compliance Manual at Sections XIX.G (“Form M-1 Obligations for MEWAs and Participating Employers”), XXII.D (“Consequences of Form 5500 Noncompliance”), and XXIV.O (“Summary of Benefits and Coverage (SBC) Under Health Care Reform”). See likewise EBIA’s HIPAA Portability, Privacy and Security Manual at Sections V.F (“Penalties for Violation of Genetic Information Nondiscrimination Act”) and X.F.3 (“Additional Notice and Disclosure Relating to State Premium Assistance Subsidy”); EBIA’s 401(k) Plans manual at Sections VIII.D.2 (“Automatic Contribution Arrangement (ACA): Specific Preemption”) and XXVI.K (“Blackout Notice Requirements”); EBIA’s Health Care Reform Manual at Section XVI.I (“Consequences of Failing to Provide the SBC”); and EBIA’s Group Health Plan Mandates Manual at Section XXII.F.1 (“GINA Title I Enforcement”).

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What Are The ERISA Requirements For Plan Documentation?

You cannot browse social media, watch the nightly news or read your local newspaper without coming across something about the impact of the Affordable Care Act (ACA). And while the jury is still being decided on whether health care is more “affordable,” there’s no question that it’s becoming more complicated to be in compliance with health care laws.

This is where the Department of Labor (DOL) comes in. Their top expectation is that plan sponsors have proper documents that memorialize their intentions in writing. And they’re getting more aggressive at investigating employee benefit plans to confirm the most basic ERISA compliance requirements. If it’s important to the DOL, it needs to be important to you.

What are the ERISA requirements for plan documentation?

Simply put, ERISA requires that all employee benefit plans must have a written plan document. This requirement applies to all plans, regardless of their size or the size of the sponsoring employer. If you sponsor an employee benefit plan, you must have a plan document. And it must comply with ERISA requirements. Period.

Additionally, it requires that the written plan document must contain specific, express provisions. That means, it matters what your document says and, to a certain extent, how you say it.
And, finally, ERISA requires that a summary of the more important plan provisions, called a Summary Plan Description (SPD for short) must be furnished to all plan participants. The SPD must be written so that the average participant can understand it.

All of these rules are specific and clear under ERISA. However, compliance isn’t always so simple, right?

What, exactly, is a wrap plan document?

A wrap plan document is a legal document that “wraps” together, or combines, all welfare benefit plan arrangements and/or group insurance policies and contracts and creates a single plan.

Is it required? No. Not yet, at least. Is it recommended? Highly. Why? Read on.

Why do we need a wrap plan document?

If a sponsoring employer (referred to as Plan Sponsors) is simply looking to their insurance policies or contracts to function as their plan documents, that’s not enough. That’s because insurance contracts and policies are almost always incomplete around specific operational details required by ERISA. This leaves the door open to unforeseen legal and audit risks.
Why are the insurance contracts incomplete? Because group insurance contracts are written to cover the legal needs of the insurance carrier; that is, group insurance contracts are written to comply with state insurance laws, and not to satisfy the requirements of ERISA or provide legal protection to the Plan Sponsor.

This certainly creates an issue for Plan Sponsors. If the contract is incomplete as an ERISA compliant plan document, it begs the question, “How do I make sure that my contract is compliant with ERISA requirements?” And the best answer is: Adopt a wrap plan document.

How does it work?

A wrap plan document incorporates the existing welfare benefit plans by reference. This means the specific provisions of each underlying plan remain in the separate contracts or policies. Those plan-specific provisions are not addressed or listed in the wrap plan document. Rather, the wrap plan document supplements any missing, or lacking, information in the insurance contracts or certificates. Together, the wrap plan document and the separate contracts & policies comprise a complete plan document in order to fully comply with ERISA.
Everything works together to reduce risk. A true collaboration.

So remember that concept…incorporation by reference…it’s the golden ticket. The key. The tick of the clock. It’s what makes this whole concept work. And remain fairly simple.
Are there other benefits?

Absolutely! A compliant SPD is easily created from the wrap plan document.

As you might expect, SPD compliance has the same challenges as plan document compliance if the sponsoring employer relies on the insurance carrier materials (booklets, summaries, or certificates) to function as the SPD for the plan.

More often than not, the insurance carrier materials are not easily understood by the average participant, as they are often quite comprehensive. They also may not include specific employer information, as required by ERISA.

Accordingly, a “wrap SPD” will supplement those carrier materials that are furnished to participants with any information that is missing or lacking, just like the wrap plan document supplements the contracts or policies. It’s another marriage. Another collaboration.

And the DOL cares a lot about what you are communicating to participants, how you are communicating it, and if it complies with the requirements. SPD compliance is extremely important. And a wrap plan document really facilitates SPD compliance.

Any more benefits?

Of course! And it’s a big one for plans that cover 100 or more employees. It’s the proverbial icing on the cake

By adopting a wrap plan document to simplify ERISA’s reporting requirements, you’ll also be able to consolidate multiple Form 5500 filing requirements into one single Form 5500 filing requirement. And the bonus here is that it reduces form preparation expenses and eliminates multiple filing deadlines.

I like to say that a wrap plan document “dots the I’s & crosses the T’s of an employer’s welfare benefit plans. It’s like that last piece of a really great puzzle.

For a benefits consultant like us, it’s one of the most important, and best, pieces of a really cool puzzle…the ERISA compliance puzzle, that is.