Is A Wrap SPD Needed?

We understand the hassles that come with changing labor and tax regulations. That’s why we lend our services from consultation to wrap SPD document generation for employers wishing to comply with these regulations. Is a Wrap SPD needed?

is a wrap spd needed

Are you hitting a brick wall with business compliance?

But just what is a wrap SPD? This is a document disclosing details of benefits, the employer affords the employee in compensation for services rendered and is required to be by law to be filed with the department of labor. We’re here to simplify the compliance process for employers.

When the Studebaker Corporation closed down the operations in 1963 due to inability to meet pension promises made to employers, the federal government moved to enact pension reforms. Through the 1974 Employee Retirement Income Security Act all the employers are supposed to view benefit payments to pension plan participants as a form of corporate debt, the participants being the lenders to the sponsor of the plan and therefore comply with some reporting and disclosure rules.

This new perspective requires transparent financial reporting and filing of Form 5500 annually, detailing conditions of benefit plans. Additionally, employers have to provide employees with Summary Plan Description (SPD) of how they will be compensated for their services. Compliance with this ERISA reporting and disclosure rules means additional administrative tasks and documents to be filed. To avoid such extra regulatory burdens, employers have therefore sought ways in which they can simplify these extra administrative tasks.

One stellar way is to use the WRAP SPD. What is WRAP SPD? In the quest to smoothen pension plans administrative tasks, employers have decided to roll up all employee benefits into a single plan and summarize the benefits in a single document using ERISA language. This document is the SPD WRAP document, and it provides details of: All the welfare and health benefits the employer offers the employee and beneficiaries. References to complementary Insurance booklets and certificates Disclosures mandated by ERISA and COBRA (Consolidated Omnibus Budget Reconciliation Act) ERISA however, in particular on how the SPD document content, language, formatting, and deadline. Additionally, changing labor laws make the preparation of the document hectic. That’s why employers need help when it comes to ERISA compliance. We can help employers make the necessary compliance adjustments and also generate the wrap SPD documents using our updated continuously ERISA wrap SPD system.

Who needs WRAP SPD? ERISA is a USA federal tax and labor law that tell Private Sector employers the minimum pension standards they have to comply with. Any private industry employer that provides welfare and health plans, therefore, must satisfy ERISA SPD requirements Health, welfare and other Employer Assistance Programs subject to ERISA requirements must comply with these reporting and disclosure rules.

1. Disclosure: Provide employees with a readable summary of information about the plan. This includes a summarized description of terms and conditions of the program and contains the name and number of the pension plan, benefits afforded plus amounts deductible and co-pay and eligibility requirements. Other mandated information includes the claim filing and investigation process and information on the plan sponsor and trustees. If it’s a medical plan, the employer should detail all the benefits it provided before the 2010 Affordable Care Act.

Additionally, disclose information regarding mothers and newborns. Provide information on COBRA rights if subjected to one. 2. Reporting When it comes to reporting, large plans with more than 100 participants, employers are to annually report on the plan status by filing form 5500 with the labor department and the Internal Revenue Service. Plans with less than 100 participants must file form 5500-SF.

These forms detail if a plan is funded or unfunded plus other operations and investments. Importance of SPD WRAP documents Using wrap to bundle all benefits into a single plan then summarize it in ERISA language for SPD compliance reduces plan administration tasks. The wrap document also makes references to insurance certificates and master contract booklets; therefore, satisfy the SPD.

SPD is used by the Department of Labor to review a firm’s file during an audit. The document, therefore, makes it easy to review and file the form 5500 as only one form is submitted. Additionally, SPD helps translate complex actuarial language into ERISA required, simple style that employees can understand. Failure to comply with ERISA SPD rules attracts a fine. No other documents can be used as WRAP SPD alternatives; this is because the language used and reporting requirement in SPD document differs from different materials such as Insurance booklets and should not be substituted with such. The wrap document, therefore, helps to avoid penalties.

The WRAP SPD not only soothes plan administration tasks but also gives auditors and employees evidence of employer’s consciousness towards the health and welfare of the employee.

Is a wrap SPD needed? BC2CO can help with your wrap plan document needs.

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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.

What Is ERISA Wrap SPD? Everything You Need To Know

What is ERISA Wrap SPD?

If you don’t know the answer to this question, you’re not alone. There are many people that are unfamiliar with ERISA and its requirements. A lack of knowledge could cause a number of problems for you.

Who Needs To Learn About ERISA?

Anyone who is either an employer or an employee should take the time to educate themselves about ERISA. If you are an employer, federal law requires you to meet the ERISA requirements. If you are an employee, then you are entitled to certain things because of ERISA requirements. You should make sure you are getting everything that you need.

It’s okay if you don’t know a lot about ERISA right now, but you should work to change that. You can find answers to many common questions below.

What Is ERISA Wrap SPD?

ERISA stands for the Employee Retirement Income Security Act. It describes a group of federal laws that were specifically designed to protect the employees that work for a company that provides things like pension or retirement plans. It also protects employees who work for a business that provides insurance coverage.

If an employer offers a plan that is subject to ERISA, they need to make sure that they follow compliance procedures. This includes proper reporting, written plan documents, and a process for documenting claims. Employees must also fill out necessary forms, such as the Summary Annual Reports.

SPD stands for Summary Plan Description. This is a detailed description of the plans and benefits provided. The booklets that insurance companies provide are not enough to be SPD compliant. Employers will have to work to satisfy the Department of Labor requirements.

A Wrap plan can help employers to do exactly that. A Wrap plan is a plan document that can either wrap around one benefit or combine multiple benefits into a single document. With a Wrap plan, employers can ensure that they have documentation with proper ERISA language that they can distribute to their employees.

erisa wrap spd

Who Is Exempt From These Regulations?

The majority of employers are subject to ERISA regulations. The only employers that are exempt are the employers that do not offer benefits like retirement plans or health insurance at all. LLCs, corporations, and nonprofits all have to comply with these regulations.

With that said, there are a few exemptions to the rules that are in place. Governmental employers do not have to follow these regulations, and church plans are exempt as well. This is because churches are currently exempt from taxes. While these types of employers are exempt right now, it’s possible that this could change in the future.

What Are The Penalties For Failing To Meet ERISA Requirements?

If a company does not meet the requirements outlined by ERISA, they will have to face a number of penalties. If the SPD is not given to the Department of Labor by the necessary deadline, employers can be fined up to $152 a day until the correct documentation is given.

If a company continually refuses to submit this documentation, additional penalties could be added on to the ones described above. Any company that is subject to these requirements needs to work hard to make sure that they are compliant with existing regulations.

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If you’re a business owner, you’ll want to take the time to learn more about ERISA and what it requires. You should ask us how we can take away the worries of ERISA compliance.

Need ERISA Wrap SPD Service? Call (515) 214-2424

Recognizing Summary Plan Description Distribution Requirements

Summary Plan Description Distribution RequirementsWrap plan documents are commonly used by the companies that are trying to find a way to truly present their benefits plans effectively. They need to be able to demonstrate their ERISA compliance in the first place. They also have to communicate effectively with their employees, their investors, and many of the other parties who will be interested in their ERISA compliance. It’s important for them to be aware of summary plan description distribution requirements.

These plans absolutely have to include a summary of the relevant documents. Wrap plans themselves are summaries, which can make things easier already. However, it’s possible to be even more organized than that, especially for the organizations that already have very detailed plans and who need to make sure that everything that they have been comprehensible.

This wrap plan needs to be worded effectively and clearly.

While it should be written formally, of course, the language should still be less formal than the language that will typically be used throughout the rest of the wrap document itself. This summary is what a lot of employees are going to consult when they are trying to understand what is going to be contained in a particular benefits package.

Other professionals will probably consult this summary before they look at anything else in the associated documents. They might only decide to look at the summary, in fact. Even professional scientists will sometimes only read the abstract of a particular science paper, since they have a tendency to read so many different scientific journal articles on a regular basis and they need to be able to save time.

The contents of the wrap plan are excessively important, especially for the people who are trying to find a way to quickly and accurately explain everything to large groups of people, or at least to potentially large groups of people. Obviously, these are documents that can be altered, addressed, and revised. However, getting it right the first time is important, especially since it will provide a useful template for when everything inevitably gets updated at some point.

It’s important to be concise when writing a summary, which has to be relatively short by definition. Specifically, the coverage limitations need to be mentioned, if only briefly. The summary plan is not going to be able to include all of these additional details, but it should at least give people an idea of the extent of the coverage in question. The wrap plan should certainly include direct information on the benefits themselves. People should not just be able to work backwards, figuring out the benefits based on the limitations associated with the benefits and the coverage.

There might be some cost-sharing provisions that should be mentioned in the summary plan, especially if these cost-sharing provisions are substantial at all. However, as long as they are in any way notable, they should still be included as part of this important summary.

Employees will need to have an idea about how they should file benefits claims. While they might have a general idea of how to do this, it’s still important to make this clear. Employees will also be able to participate in these benefits plans at different times, and there should be information related to the timetable involved.

These wrap plans will certainly change at some point, and everything else will have to be revised accordingly. In some cases, informing people about the changes through a different document, such as a summary of the modifications, can suffice.

Companies that present everything this effectively will be able to avoid a lot of issues in the future. They won’t run into problems with miscommunication. In many cases, they will also manage to save themselves a lot of time and effort in the long run. Once these sorts of documents are established, they will usually only need to be modified every now and then. Most of the work will have already been completed. As long as the wrap plan documents and the associated summaries are completed effectively enough initially, there shouldn’t be any worries at all. Getting some assistance with this process can certainly help, especially for the employers who are used to working with lots of different professionals.


Summary Plan Description Distribution Requirements

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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.

 

Wrap Plan Document Preparation Assistance and Support

More and more employers are now choosing to get wrap plan document preparation assistance, which means that wrap plan document preparation at this time is more important than ever before. Employers that offer a lot of health benefits and benefits in general to their employees will often have a difficult time explaining everything that has been outlined in those benefits packages. Offering benefits to employees can be a complex process. An official wrap plan document brings all of the associated contracts and group insurance policies together, so there will be only one plan for employers and employees to examine. In many cases, the resultant plan will include information about health reimbursement, medical benefits, cafeteria access, dental benefits, and the vision benefits that an employer might offer.

The administrative process associated with employee benefits packages can certainly be complicated. When employers are able to use a wrap plan instead, they will be able to save time and money. Their employees will also have an easier time learning about their benefits packages, making them feel more secure and giving them the chance to understand everything associated with a particular job.

We at BC2 are wrap plan document preparation experts.

It should be noted that wrap plan documents typically contain more information than most insurance documents. Employers and employees will not find themselves doing research on their own in order to fully understand some of the employee benefits policies. Wrap plan documents manage to be both simple and detailed at the same time, which is a great balance to strike.

There is a lot of information that ERISA wants that is not always included in some insurance documents, or at least not thoroughly included. Issues like that are less likely to happen when wrap plan documents are prepared. Employers will avoid a lot of different problems this way. Employees will also have an easier time planning for their own futures in the process.

Putting together a wrap plan document initially can require some care, obviously. Employers have to avoid making errors at this stage. Making mistakes at this stage can be serious, and making mistakes at any other stage in this process can be just as problematic. Getting professional assistance with the whole wrap plan document preparation process can make all the difference in the world for the employers who are trying to make sure that everything goes smoothly and successfully. Our organization would be happy to help companies with this stage.

There are different types of wrap plan documents. We can help different clients decide on the wrap plan document that is going to really work for them and meet the needs of their organization. Different welfare and health plans have different structures. We have plenty of different templates for wrap plan documents, and we should be able to find a template that will work perfectly for your company, given the structure of your welfare and health plan. You’ll have an easier time analyzing those health and welfare plans, and this will also be the case for your employees.

wrap plan document preparation assistanceGetting assistance with the wrap plan document preparation process can already make everything better for the people involved. However, it’s important to remember that this is something of an ongoing process to a certain extent. A wrap plan document is not necessarily a finished product. It might be a functionally finished product for a year or so, but many things can change in a year.

Wrap plan documents will have to be revised once a year in a lot of cases, since the laws involved will change. In some cases, employers will also update the benefits packages that they offer their employees in the first place, and they will have to adjust their wrap plan documents accordingly. We will certainly be available to help at those moments as well, making it easier for employers to adapt when necessary. Employees will also have an easier time adapting to the changes to their benefits packages, since these might occur each year.

Getting wrap plan documents is going to become more common over the next few years, since more and more employers are now realizing that there are lots of benefits associated with them. Some employees are going to come to expect them. Employees tend to change jobs relatively frequently these days, and this means that they will have a lot of experience with different workplaces. Many of them will expect there to be wrap plan documents, and employers will find that many of their competitors will use them. It makes sense to start planning your wrap plan document as soon as possible.


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Cobra Notice | Cobra Compliance Nightmare

Cobra Notice

An employee quit last year and you’re pretty certain that you sent a cobra notice but can’t prove it. Do you want to know your potential liability?

A company is needed to inform a staff member and certified recipients of their rights to continue their group health strategy advantages within 14 days from the date alerted of a certifying occasion. A certifying occasion is an occasion which disqualifies a worker or a certified recipient from additional involvement in the company’s group health strategy.
The Internal Revenue Code enforces an excise tax on any company preserving a group health insurance that stops working to satisfy COBRA requirements. The IRS can evaluate a charge of $100 daily throughout the noncompliance duration for each certified recipient impacted by the failure to comply. The optimum is $200 per day if it impacts 2 or more competent recipients in the very same household.

cobra noticeWhen calculating the noncompliance duration, it begins on the date the company’s failure to adhere to COBRA initially ends and happens on the earlier of: (1) the date the failure is remedied, or (2) 6 months after the last day the certified recipients COBRA extension protection might have been ended not consisting of terminations for failure to pay. For failure to supply protection, nevertheless, the noncompliance duration does not start up until 45 days after COBRA protection is asked for.

The noncompliance duration does not begin up until the company understood or ought to have understood of its noncompliance with COBRA if a company accidentally stops working to comply with COBRA. A company will be considered to have actually accidentally stopped working to adhere to COBRA if it can show that it did not know and had no factor to understand that it remained in noncompliance with COBRA requirements. Yeah, best of luck with that!

A company is managed a 30-day grace period for fixing its failure to adhere to COBRA. When the company understood or ought to have understood that the failure existed, the grace duration starts on the date. Supplied that the company’s compliance failure was the outcome of affordable cause and not willful neglect, the IRS can not enforce the excise tax on a company who fixes the offense within the grace period.

A COBRA compliance failure is considered fixed if (1) the failure is retroactively reversed to the degree possible, and (2) the certified recipient is put in a monetary position as good as the position which he would have taken pleasure in had the company not stopped working to adhere to COBRA. The recipient should be dealt with in the way which he would have taken pleasure in had he chose the most beneficial extension protection offered under the strategy.

ERISA likewise could fine companies who stop working to supply the needed COBRA notifications to certified recipients, to a $100 a day fine for each individual to whom the company stops working to offer the statutorily needed notification. ERISA charges apply to all group health insurance other than little company strategies (less than 20 workers); church strategies; federal government strategies; and other non-ERISA strategies.

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ERISA Compliance Checklist: Make Sure You Are Compliant

We have put together an ERISA Compliance Checklist that you can follow to make sure you are following the rules.

Does your business offer a qualified retirement plan to your employees? If so, you most likely fall under the guidelines of the Employee Retirement Income Security Act of 1974, otherwise known as ERISA. If you fail to follow the guidelines outlined by ERISA, your company can be subject to investigation and large fines.

If you answer “NO” to any of the following questions it could lead to compliance problems for your company.

1. Are all participants in your plan provided an annual financial report, a summary of the plan and of any changes made to the plan during the year? You should make sure all participants sign for their copy of the plans to assure they received them.

2. Do all participants know who the plan administrator is and that the plan administrator has copies of all plan details they can view at any time?

3. Is your plan protected with a fidelity bond to protect you and the participants from fraud or dishonest administrators?

4. Did your plan make all payments on time and in the correct amounts?

5. Did payments into the plan happen on a timely basis?

6. Did the company, or the administrator, respond to all written requests for information in 30 days or less?

7. Do you have written rules for requesting benefits and appealing denied claims? Did you adhere to the rules?

8. Is the plan diversified to protect the investments of participants?

9. Are the investment plans reviewed to make sure they are done in the best interest of the participants?

10. If the plan allows for participants to choose their own investments, are they provided with proper and full information to make informed decisions?

erisa compliance checklist

Similarly, if you answer “YES” to any of the following questions you may be in jeopardy.

1. Have any plan assets were used to pay expenses that were not authorized, excessive or unreasonable?

2. Has any official or administrator of the plan used funds from the plan for their personal benefit?

3. Has the plan invested in the company or any plan officials?

This short ERISA compliance checklist should get you started thinking. Let us dig a little deeper into a few of the concerns.

Your company plan is closely monitored by the IRS. If they determine you have not been following the rules setup in your plans guidelines, the IRS can invalidate the entire plan eliminating tax advantages to both the company and participants. For this reason, we should discuss a few key elements.

All current participants, beneficiaries and terminated employees should be receiving an annual fee report. Additionally, if you plan to make any changes to your plan, you must notify them 30 to 90 days in advance of the changes taking affect.

What constitutes timely deposits? The federal guidelines suggest you should make deposits into the plan no later than the same time you pay payroll taxes. Ideally, payments into the plan are made as quickly as possible.

Another area to watch closely is your “eligible to enroll” employees. You must make sure they are provided all paperwork, information and the opportunity to enroll at the time outlined in your plan.

Does your plan allow employees to take out loans? If so, make sure this area is closely monitored for proper repayment of loans as stated in your plan’s guidelines. Failure of a participant to repay the loan on time can result in forfeiture of their tax benefits.

One area which is carefully evaluated during audits is employer matching contributions. Make sure all contributions from the company have been properly allocated to the correct employee. This can be particularly challenging in companies with variable contribution amounts.

Non-Discrimination – You should verify that both your plan and the company’s practices adhere to 401(k) ADP and ACP discriminatory tests. These tests verify the plan does not favor business owners, the company, or higher-paid employees. Fairness is required in all plan details.

Verify all deferrals in excess of plan rules are distributed back to the appropriate participants.

It is advised you have your entire plan reviewed by an expert in ERISA compliance on a regular basis. Laws and IRS Rules change almost every year making an annual review of your plan a necessity.

Using our ERISA compliance checklist and discussion, you can keep your company retirement plan in compliance and be prepared for your next review or audit.

Does your company need ERISA Compliance consulting, Form 5500 preparation or other ERISA compliance services? Call (515)-244-2424 for service or questions or request quote.

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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ERISA Services: What is ERISA and How Can ERISA Consultants Help?

ERISA Services are needed now more than ever before in the workplace and in your business.

When you hire new employees one of the things that they will want to know is whether they will be able to save for retirement and how they can go about it so that by the time they retire they have enough of a nest egg to live on. ERISA, which is the Employee Retirement Income Security Act has been put in place to take care of all that. It was enacted in the 70’s and it is used to provide employers, insurance companies and pension companies with guidelines on employee benefit plans. The Act doesn’t cover government employees or church employees.

ERISA doesn’t force you, as a private business, to have pension plans for your employees but if you decide that you want to have them it sets down some requirements that you must meet. ERISA was initially enacted to stop mismanagement of pension plans by private employers, but over time its scope has been expanded so that employees are able to access much more information about their retirement savings.

According to findlaw.com: “Prior to ERISA’s enactment in 1974, the U.S. Department of Labor started regulating employee benefit plans when the Welfare and Pension Plans Disclosure Act (WPPDA) came about in 1959. The WPPDA required employers to make plan descriptions and annual financial reports available to the government and plan participants. Although this was meant to give employees a chance to keep an eye out on any abuse or mismanagement of their funds, the WPPDA was still very limited in scope and it was because of this that ERISA was enacted. ERISA provisions apply to plan years starting on or after January 1, 1975. The Act has widened the scope of information being relayed to employees. It has implemented a type of healthcare plan enforcement that requires employers to manage funds exclusively for plan participants and their best interests, and expanded on the reporting procedures to the government.”

erisa services

As an employer you may not be an expert in retirement savings plans and you may find yourself unable to decipher all that the Act requires and put it into action. It is for this reason that many private companies choose to hire consultants to provide ERISA services. It is very important to make sure that you are in compliance with the requirements of the ACT – failure to do so will result in hefty fines for each employee and you may even find yourself facing lawsuits. A good ERISA consultant will help break down the requirements of the act so that you are never found liable either by the government or by the courts. Here are some of the areas where they can help you:

•    Failure to comply with ERISA can lead to serious fiduciary exposure. Your directors and other executives can find themselves exposed to expensive lawsuits for failing to comply with an act that they didn’t know about, or didn’t understand in the first place. A consultant will let you know about the obligations of the business owners so that you can minimize risk.

•    ERISA services and compliance consultants also play an important role on retiree medical benefits. Some employers will reduce retirement medical benefits in an effort to reduce the overall costs of running the business and almost always this is followed by litigation. If you hire the right ERISA consultant they will let you know what you can and cannot do so that you stay on the right side of the law.

•    There are many third parties involved in the administration of ERISA and disputes often develop on fees, responsibilities and more. These also lead to lawsuits that can be expensive and time consuming. An ERISA services consultant will be charged with taking care of all third parties on your behalf and they will advise you whenever necessary.

The pension plan for your employees is something that should be handled by an expert because if things go wrong it can end up costing your business. Experienced ERISA consultants like Benefits Compliance Consultants Inc. can do this for you.

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