DDI Benefits Newsletter | June 2016

As your trusted health plan advisors, we are bringing to your attention a new DOL initiative about an old ERISA requirement that you’ll probably want to add to your compliance “to do list.” Below is detailed information about ERISA’s SPD and Plan Document requirement.

But to summarize, due to health care reform, the DOL was able to hire more auditors and stated a goal of auditing all employee benefits plans by the end of 2015. For the record, we haven’t heard of a single audit in our neck of the woods! The compliance check would include review of SPD’s and Plan Documents, of which most employers do not actually have in place.
In the past, the Plan descriptions and contracts provided by insurance companies were believed to satisfy these requirements. However, due to added provisions and health care reform they likely no longer suffice. Should you comply? Well, yes of course you should, and the good news is… we can help.

If you don’t take action now, just keep in mind that if you are contacted by the DOL, you have 30 days to provide the required documents, at which point you should call either an ERISA attorney or your health insurance consultants at DDI!

Federal Compliance Alert:
SPD’s and Plan Documents

Did you know that due to health care reform the Department of Labor (DOL) has increased their focus on auditing all employee benefits plans, including health and welfare benefits plans?

What’s Required?

ERISA (the federal Employee Retirement Income Security Act) requires employers of all sizes who are plan administrators of their group health plans to comply with 2 important requirements or risk potential penalties and possible audits:

• Maintain and distribute Summary Plan Descriptions (SPDs) to plan participants which accurately reflect the contents of the plan and which include specific information as required under federal law.
• Group health plans must be administered in accordance with a written Plan Document which must be made available to plan participants and beneficiaries upon request.

Many companies mistakenly assume that insurance contracts, certificates of insurance and benefits summaries fulfill the ERISA requirements for an SPD and Plan Document–but they don’t include the required or recommended provisions that protect the plan and the employer. Health care Reform has added even more complexity to the disclosure requirements and as
accelerated the DOL audit program.

Penalties for Non-Compliance

Employers/plan administrators may be liable for penalties if they don’t
provide an SPD or have a current Plan Document:

• Failure to provide an SPD or Plan Document within 30 days of receiving
  a request from a plan participant or beneficiary can result in a penalty
  of up to $110/day per participant or beneficiary for each violation.
• Lack of an SPD could trigger a plan audit by the U.S. Department
  of Labor (DOL).
• The DOL has increased its audit staff and national enforcement initiatives
  to investigate employers’ compliance with Health Care Reform, resulting
  in companies of all sizes being audited and being required to provide
  an SPD and Plan Document.

The Solution

Typically, the cost to develop an SPD and Plan Document can be very expensive–but we have solved this problem with a sophisticated system developed together with a major ERISA law firm and endorsed by the National Association of Health Underwriters that makes it easy and economical to comply with federal requirements.

DDI Benefits, Inc. will provide you with a Wrap SPD and Wrap Plan Document which are designed to wrap around existing certificates of insurance and benefit plan booklets to provide the required provisions and information necessary to comply with ERISA. To be compliant, the Wrap SPD and accompanying benefit plan component documents must be distributed to plan participants. Our document compliance solution includes the following benefits:

• Customized Wrap SPD and Wrap Plan Document that provide the required ERISA provisions and information that will help you achieve compliance. Distribution guidelines that explain how and when to provide these compliance documents to your plan participants.
• The ability to keep your documents current and updated as the federal government issues new amendments or when your plan information needs to be changed, typically at renewal.

Cost:

Contact DDI for pricing.  503-206-5654  info@ddibenefits.com

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For
more information on creating a customized benefits package for your employees,
contact DDI Benefits at 503.206.5654, or via email to dena@ddibenefits.com