Compliance Stuff

Employer-sponsored group health plans operate at the intersection of multiple federal regulatory frameworks — ERISA, the ACA, COBRA, HIPAA, the Mental Health Parity and Addiction Equity Act (MHPAEA), and more. Each imposes its own documentation requirements, reporting deadlines, and operational obligations. The challenge for most employers is not a lack of intent to comply, but the sheer complexity of keeping pace with layered and frequently updated rules. A proactive, systematic compliance review conducted with legal guidance is one of the most effective tools employers have to reduce legal exposure, strengthen plan governance, and prepare for regulatory inquiries . The following overview identifies the key compliance areas that such a review should cover. Plan Governance and ERISA Documentation ERISA requires every welfare benefit plan to be maintained pursuant to a written plan document that satisfies specific requirements. Compliance reviews routinely reveal documentation gaps that...

Applicable large employers (“ALEs”) are subject to reporting requirements under the Affordable Care Act (the “ACA”). To comply with the reporting requirements, an ALE must file a Form 1095-C with the IRS reporting certain information about the ALE’s offer of coverage to each full-time employee, identifying the employee, spouse, and dependents who are covered under the employer’s self-insured group health plan, and provide a copy of the Form 1095-C to each full-time employee. The reporting requirements provide information to the IRS that it uses to determine whether the ALE has complied with the offer of coverage rules under Section 4980H of the Internal Revenue Code of 1986, as amended (the “Code”) . If an ALE fails to offer affordable, minimum-value coverage to at least 95% of its full-time employees, it can be subject to a penalty under Code Section 4980H(a). If the ALE fails to offer affordable coverage to one or more full-time employees, the ALE can be subject to a penalty under Co...

In a win for plan sponsors, the recently enacted  Employer Reporting Improvement Act  and the  Paperwork Burden Reduction Act  (the Acts), among other things, introduce several significant changes to the reporting and enforcement rules of the Affordable Care Act (ACA).  The Current Rules Forms 1095-B and 1095-C:   U nder the ACA, plan sponsors, specifically Applicable Large Employers (ALEs), must report information about the health coverage they offer to their employees.  This ACA reporting is done through Forms 1095-B and 1095-C, which must be filed with the IRS and provided to all full-time employees and employees receiving employer-sponsored coverage. (This is the case, even though the ACA’s individual mandate is currently set to $0, and therefore functionally isn’t being enforced.) Key aspects of ACA enforcement also include: A Tight Turnaround to Respond to Proposed Assessments : The IRS may assess employer shared responsibility payments (ES...

  There are a number of mistakes—some simple and some not-so-simple—that employers should avoid to prevent receiving a panic-inducing assessment letter from the IRS. Mistake #1: Failure to Indicate that Minimum Essential Coverage Was Offered to Full-Time Employees One of the most common issues that I see is failure to indicate to the IRS that an offer of MEC was actually made to at least 95% of the employer’s full-time employees and their dependents. This will lead to an assessment of financial penalties under Internal Revenue Code (“Code)” Section 4980H. On Form  1094-C , Part III, Column (a) should be completed to indicate whether such an offer of coverage was made for all 12 months or for certain months during the year. Frequently, I have found that payroll companies will automatically default to checking the “no” box on the 1094-C, or leaving this box blank when preparing the 1094-C for their clients. Many organizations submit this Form 1094-C without carefully reviewing i...