Recently reported on Employee Benefit Adviser that the DOL is aggressively pursuing 1,000’s of health plan administrators to determine if they Plan is compliant with Federal law.
Some of the documents reported to be of specific interest include the following:
For one of our clients that was faced with a burdensome audit of all of their administrative documents, it required our account management team to assemble two, three inch binders of details. In the end, our client passed the audit without any findings (and certainly no penalties); however, it is without question that these audits take a deep dive into all aspects of the plan.
Why is the Federal Government allocating resources to place employer administration of a health plan under such a microscope?
Some would speculate that revenue that is necessary to pay for health care reform will be (partially) the result of extraordinary fines and penalties imposed on employers that are not compliant. At Landmark Benefits, we believe more significant driving force is toward a greater protection of employees. The fact is, as it is in other walks of life, an overwhelming number of employers take great pride in ensuring the protection of their employees; however, the few that do not share this philosophy have caused the transformation at the DOL to audit countless employers.
What are the potential penalties? According to the Compliance Bug, “After examining the DOL’s enforcement database, ComplianceBug found nearly 32% of the health and welfare plans penalized over the past 12 years were in excess of $10,000 and 5% in excess of $50,000”. Additionally, “47% of plans have fines between $10,000 – $50,000 with nearly 5% of those being greater than $100,000”
When visiting with non-clients of Landmark Benefits, what are we seeing for the most significant omissions?
Bottom line – the management of employee benefits will continue to witness an escalation in compliance. At Landmark Benefits, we maintain a comprehensive portfolio of compliance documents for each of our clients; however, we also have in our library the DOL Audit Guide for Employee Benefit Plans. If you would appreciate a copy, please contact our office and we will be happy to forward.