A requirement of the Department of Labor (DOL) is that all employers, regardless of size, provide an ERISA Summary Plan Description (SPD) for all covered health and welfare benefits plans (Health, Dental, Vision, Wellness, Voluntary, etc.). This is a separate document from the Certificate of Coverage (COC’s) provided by Carriers and is required to be distributed to all participating employees within 90 days of Plan enrollment.
While most groups have one of the ERISA outlined requirements, the Plan Document (COC) for each benefit plan; the greater majority of companies do not have the required ERISA SPD. In fact, the DOL indicates that their projections are that 90-95% of companies are out of compliance with at lease one aspect of ERISA compliance, for most having and distributing the ERISA SPD.
ERISA has been active since 1974 and expanded in the early 1980s to include health and welfare benefits. To date, not much has been done with regard to policing ERISA compliance and the expectations that were laid out from the inception of this law have not changed much. However, the level at which the DOL is enforcing this compliance has changed.
Why the urgency? The DOL, more specifically, the EBSA (Employee Benefit Security Administration) has intensified their audits and policiing of ERISA compliance. In their recent 2015 budget request state that during FY 2015, they will achieve an estimated $1.3 billion in total monetary results (including $200 million in participant recoveries). The EBSA now employs 1,017 people who are vigorously enforcing ERISA compliance. In their 2013 release of fines and penalties, they boast collecting $1.6 billion and are targeting the same amount for 2014*.
There are many risks to employers for not being ERISA compliance. The greatest of these risks are the fines imposed for not having and distributing the ERISA SPD.
All is not lost– yes, it is very easy to be out of compliance, yet it is just as easy to be in compliance. Not sure how to get there? Professional Insurance Programs can assist you with what you need. If you have interest or want to know more, contact us at 414-277-0154 and our team can help mitigate your risk and get you on your way in being in compliance.
*Information provided by TASC, “Total Administrative Services Corp.,” a partner of WDAISC.