The Department of Labor has said it wants to audit all employee benefit plans in the country by the end of 2015.
While it may be hard-pressed to meet that goal, the DOL will be out in full force to audit employers’ health plans to ensure they comply with the Affordable Care Act. All employers that provide employee benefits to their workers need to be prepared when the DOL comes knocking.
During an audit, the DOL will review health and welfare plan documents and other plan materials to ensure. These are essentially compliance audits. They want to see if you have all of the correct documents and that you are administering those documents in a way that is consistent with federal laws and regulations.
The DOL will levy fines for non-compliance.
According to audits that were reported to the trade news website Employee Benefits Advisor, DOL agents will be asking for:
• Plan documents for each plan, along with any amendments. (Content in all plan documents must comply with ERISA regulations.)
• Trust agreement (if any) and all amendments.
• Current summary plan descriptions.
• Form 5500 and accompanying schedules for the most recent plan year and previous three years. This form is used to file an employee benefit plan’s annual information return with the DOL. It should include not only health plan information but also 401(k), IRAs, money purchase plans and stock bonus plans.
• A listing of all current service providers, and those from the past three years.
• All current contracts with administrative service providers on the plan, and most current fee schedules.
• All insurance contracts between plan and service providers.
• Name, address and telephone number of the plan administrator.
• Sample HIPAA certificate of creditable coverage, and proof of compliance with on-time issuance of COBRA notices.
• Notice of special enrollment rights, and a record of dates when the notice was distributed to employees.
• Written eligibility criteria for plan enrollment.
• Documentation regarding all mandatory employee notices, i.e., ERISA Statement of Rights, Women’s Health and Cancer Rights Act notice, etc.
• Copy of most recent monthly bill for premiums (if any) from insurance carrier(s).
• Copy of check, wire transfer or other methods of payment for insurance premium (if any).
• Enrollment form(s) for the plan.
• Employee handbook (if any).
• All documentation of claim adjudication and payment procedures.
• Fidelity bond (if any).
The fines involved can add up quickly. And while the DOL does not publish a schedule of its fines, it was documented by Employee Benefits Advisor that breaches of ERISA reporting and disclosure requirements are penalised at $110 a day, per person.
And it notes that most fines for non-compliance under the ACA are not tax-deductible, either.