Whether your organization is large or small, in the eyes of the federal government there are certain compliance concerns that any employer must consider when providing health insurance to its employees. Here we will identify five areas of employee benefits compliance that are commonly overlooked.

  1. Section 125 Premium-Only Plan – This document is required by the IRS for any employer offering benefits to be paid by employees on a pre-tax basis (or a payroll reduction). Having payroll deductions withheld on a pre-tax basis through payroll does not mean you have a compliant S125 Premium-Only Plan document.
  2. Welfare Benefit Plan/Summary Plan Description – A Welfare Benefit Plan is a legal document that is maintained by an employer outlining various health or welfare benefit policies, as required by the US Department of Labor (DOL). Examples of a health or welfare benefit include medical, health reimbursement account (HRA), flexible spending account (FSA), employee assistance program (EAP), dental, vision, disability (short and long term), etc.

It is also required that all plan participants at your organization receive the Summary Plan Description. This outlines various health or welfare benefit policies for the employee.  

  • New Hire and Annual Compliance Notices – Employers are required to provide certain notices to employees on an annual basis in relation to the benefits that they offer. This information may include, but is not limited to:
    • Notice of HIPAA Special Enrollment Rights
    • Women’s Health and Cancer Rights Act
    • Initial COBRA Notice
    • Creditable/Non-Creditable Coverage Letter
    • Summary of Benefits and Coverage
    • Premium Assistance under Medicaid and CHIP, etc.

  • ACA Tracking & Filing – Employers must track employee counts to determine Applicable Large Employer (ALE) status. If it is determined that an employer is an ALE (over 50 full-time equivalent employees), a defined measurement period and eligibility tracking would be required. 1095-C forms are generated and provided to employees and a 1094-C form is used to provide this information to the IRS.
  • 5500 Filing – While the 5500 filing does not apply to all employers, a 5500 form is required to be filed with the DOL when any policy contained within a Welfare Benefits Plan (WBP) has more than 100 participants. The form must be filed before the end of the seventh month following the plan year end date for the WBP. A schedule for each policy is attached to the form pursuant to information provided by each policy’s carrier. Once the 5500 form has been filed, a Summary Annual Report (SAR) will need to be distributed to all plan participants.

While we could devote an entire blog to any of these categories individually, this list may help you identify some common compliance gaps. Bond Benefits Consulting, along with our sister company EB Compliance, can help you to identify any area of employee benefits compliance that may have been overlooked. If you are interested in a free compliance consultation or if you need help getting in compliance with any of the areas mentioned here, contact us through EB Compliance’s website: https://www.ebcompliance.com/#consultation-here or by emailing info@ebcompliance.com.