Top 10 Compliance Gaps in Employer-Sponsored Health Plans
Shown below are ten of the most common compliance gaps that are found with employer-sponsored health plans.
Many of these areas are unknown to HR Managers of smaller organizations unless their broker educates them and helps them become compliant.
It pays to have a broker that works hard to keep you compliant.
1.
Premium Only Plan (POP) document does not exist or is not readily accessible for review, yet the employer is withholding pre-tax deductions for employee benefits.
2.
Cafeteria Plan document has not been updated to reflect changes in benefit offerings such as a Medical FSA, Dependent Care FSA or an HSA.
3.
Summary Plan Description (SPD) document does not exist or has never been distributed to all eligible employees as required by the Department of Labor.
4.
Employers are not using proper Benefit Election Forms to get signed authorization from employees for deduction amounts.
If no election/authorization form is used, the company must have a Negative Election provision in their Cafeteria Plan documents in order to take the Pre-tax deductions.
5.
Many employers do not give COBRA participants the same rights and options as active employees at Open enrollment.
6.
Employers do not send Initial Notices to their new employees.
Many employers have never even heard of the Initial Notice, because they only associate COBRA with terminated employees.
7.
Many employers also do not know that COBRA needs to be offered for a loss of dependent status (dependent no longer eligible for the plan due to age) or a former spouse who was termed from the plan due to divorce.
8.
The DOL requires that employer's who insure more than 100 employees must file an annual 5500 form reporting the benefit provided for each line of coverage provided.
The DOL requires the use of a "Wrap document" if the employer is filing for more than one benefit on the single 5500 form.
We find that many employers file for multiple benefits on the same 5500 without using a "Wrap SPD document".
9.
Employers are required by Centers for Medicare and Medicaid Services (CMS) to disclose Creditable or Non-Creditable coverage to all eligible employees on an annual basis.
The notifications must be distributed to all benefit eligible employees by November 15.
Although the employee may or may not be eligible for Medicare, their spouse or dependent may be eligible for Medicare coverage due to age or disability.
10.
Employers are also required to notify the Centers for Medicare and Medicaid Services (CMS) of Creditable or Non-Creditable Coverage, annually.
The disclosure notification should occur within 60 days of your renewal date.
Coverage is considered to be "creditable" if the prescription drug benefit within the plan is expected to pay out at least as much as standard Medicare prescription drug coverage.
Many of these areas are unknown to HR Managers of smaller organizations unless their broker educates them and helps them become compliant.
It pays to have a broker that works hard to keep you compliant.
1.
Premium Only Plan (POP) document does not exist or is not readily accessible for review, yet the employer is withholding pre-tax deductions for employee benefits.
2.
Cafeteria Plan document has not been updated to reflect changes in benefit offerings such as a Medical FSA, Dependent Care FSA or an HSA.
3.
Summary Plan Description (SPD) document does not exist or has never been distributed to all eligible employees as required by the Department of Labor.
4.
Employers are not using proper Benefit Election Forms to get signed authorization from employees for deduction amounts.
If no election/authorization form is used, the company must have a Negative Election provision in their Cafeteria Plan documents in order to take the Pre-tax deductions.
5.
Many employers do not give COBRA participants the same rights and options as active employees at Open enrollment.
6.
Employers do not send Initial Notices to their new employees.
Many employers have never even heard of the Initial Notice, because they only associate COBRA with terminated employees.
7.
Many employers also do not know that COBRA needs to be offered for a loss of dependent status (dependent no longer eligible for the plan due to age) or a former spouse who was termed from the plan due to divorce.
8.
The DOL requires that employer's who insure more than 100 employees must file an annual 5500 form reporting the benefit provided for each line of coverage provided.
The DOL requires the use of a "Wrap document" if the employer is filing for more than one benefit on the single 5500 form.
We find that many employers file for multiple benefits on the same 5500 without using a "Wrap SPD document".
9.
Employers are required by Centers for Medicare and Medicaid Services (CMS) to disclose Creditable or Non-Creditable coverage to all eligible employees on an annual basis.
The notifications must be distributed to all benefit eligible employees by November 15.
Although the employee may or may not be eligible for Medicare, their spouse or dependent may be eligible for Medicare coverage due to age or disability.
10.
Employers are also required to notify the Centers for Medicare and Medicaid Services (CMS) of Creditable or Non-Creditable Coverage, annually.
The disclosure notification should occur within 60 days of your renewal date.
Coverage is considered to be "creditable" if the prescription drug benefit within the plan is expected to pay out at least as much as standard Medicare prescription drug coverage.
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