Five Tips for Seamless ERISA Compliance
Many documents update employees on their rights and allow them to know what benefits they are getting, such as how the costs are being shared, the medical tests and procedures that the company will cover and the list of preventative services they will provide, and the list of new or existing drugs, amongst many other things. These documents are comprehensive, and participants have a right to know if there have been any changes made to them. So, as an employer, it is your right to update participants of changes made in a timely manner.
These documents include the Summary Plan Description (SPD) that highlights the details of the benefits the employees will be receiving and whether they are eligible for them. The Summary of Benefits and Coverage (SBC) document covers all the health rights that the employees will be given. The HIPAA privacy notice informs employees about how their health information is being utilized. The Children's Health Insurance Program (CHIP) Notice explains how the company can aid your children.
Employers also need to submit reports to the Department of Labor annually and on time. If they fail to do so, it will result in complications against the business as the DOL can penalize you for late submission of these documents. If you fail to provide any of these documents, the Department of Labor can charge you. It can charge $195 daily for failing to provide SPD, $145 daily for not providing CHIP, and $1443 in the case of a SPD, which is why ERISA compliance is essential. All these penalties can add up to a huge amount that will only affect your company negatively.
Make yourself prepared for the audit by understanding the process fully and keeping all the documents in one place. You should also train your HR professionals for this and ensure that those in the benefits teams fully comprehend the importance of ERISA and what its compliance requires from the company. Also, work with your legal advisors and auditors to make sure that you have all the necessary documents and procedures in place.
Here are the documents that you should keep prepared: 01k and employee benefits regulation: Family and Medical Leave Act (FMLA) compliance, Employee Retirement Income Security Act (ERISA) compliance, Employee timekeeping, Wage and hour compliance, Child labor law compliance, Wage deduction processes, and Accurate payroll and recordkeeping.
Regularly update all the employees about any changes in the documents and inform them about the rights they have. If they are planning to invest, explain to them their choices fully and completely so that they can know the risks that come with their investments, as they have a right to know where their money is going and how it will be used.
The process of compliance with ERISA may seem overwhelming and overburdening, but it does not have to be like that if you have a team that focuses on ensuring regulations by timely filing forms and telling employees about changes in documentation. Since it is not a one-time thing, but rather an ongoing process that you have to keep up with regularly, you will have to ensure that your compliance policy also evolves and adapts.
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