Is Your Business ERISA Compliant?
The following information is to advise you of a compliance issue you need to be aware of and possibly take action to ensure you avoid the risk of $110 per-day, per-employee penalties. There is an increase in the number of Department of Labor (DOL) rules regulating health and welfare plans, which is putting employers at an increased risk of significant penalties with DOL audits said to be on the rise.
Under ERISA, the failure to have or provide a Summary Plan Description (SPD) or Plan Document puts your business at risk of an audit by the DOL. However, with the correct documentation you can make sure you have the federally required documentation in place. I would encourage you take some time to review your benefit plan documents with our business associate Dustin Petty from BASE within the next month to ensure you are in compliance.
Dustin will take the time to assess your compliance risk and make sure you are fulfilling the ERISA requirements. If you find that you are failing to meet all of the requirements of an SPD and Plan Document, then you will want to move forward with an ERISA Wrap provided by BASE. The ERISA Wrap protects you from potential fines you may receive from the DOL concerning SPDs and Plan Documents in the event of an audit.
Many employers believe that certificates of insurance, insurance contracts and benefit summaries are enough to fulfill the requirement for SPDs and Plan Documents. However, they do not contain all of the required information. In order to stay clear of compliance issues, employers must have an ERISA Wrap in place. An ERISA Wrap is designed to wrap around insurance certificates and benefit plan booklets, along with other required documents, to meet the provisions that protect the plan and employer.
With the SPD and Plan Document requirement, an increase in DOL auditors, and the recent DOL overtime ruling set to go into effect December 1, 2016, means an increased chance of audit. In the past decade, 72% of DOL audits have resulted in penalties, so we urge you to call Dustin Petty at 1-888-386-9680 to assess your compliance risk.