Administration Liability and Health Care Reform

The greatest impact that Health Care Reform (ACA) has on employers is administration liability. Most employers are focusing on the health plan coverage and premium price of the plans offered. Budgetary considerations surrounding those issues are important but they are manageable and developing a strategy to meet those challenges can be easily achieved. 

 

A greater concern is the fines and fees associated with non-compliance with the administration mandates imposed on employee benefit plans. Employee benefit plans have had a significant amount of mandates imposed on them since the inception of the Employee Retirement Income Security Act of 1974 (ERISA). In addition to ERISA requirements, ACA created another set of administration mandates that amplify the burden placed on employers and create a severe financial risk not present prior to the implementation of the statute.

 

ERISA requires plans to provide participants with important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty.

 

Achieving compliance with the ERISA statute is a daunting task as there are a significant number of rules to adhere to. There are fifteen (15) specific requirements that carry a financial penalty including: Summary Plan Description, Plan Document, and Creditable Coverage Disclosure to CMS. There are ten (10) additional burdens placed on your Human Resources team by ACA, including:  Summary of Benefits and Coverage, Reports to HHS and participants on quality of care, Employer Shared Responsibility, and Notices of the Exchange. This is important to your firm as the standard penalty for non-compliance with a majority of these mandates is $110 per day per employee until compliance is achieved or $100,000.  

 

ERISA and ACA compliance is one of those areas of HR administration that is probably not high on the list of most HR practitioners’ favorite things to do. And, honestly, many simply don’t have enough people to spend sufficient time on plan issues. Compliance is difficult to achieve as each aspect of the law contains rigid timelines and specific model notice format. The Department of Labor has recently hired several thousand new employees to make sure you are in compliance. There is an increased chance of audit. The incentive for the Internal Revenue Service (IRS) and Department of Labor (DOL) to strenuously pursue audits is non-compliance provides a substantial amount of revenue to a state that is in need of revenue. It is important to note that many of the regulations apply to employers whether or not they provide employee benefits to their employees.

 

This information will be presented to attendees of the CIOMA Regional Membership Meetings – join us and invite your Human Resources team to learn more.

The CIOMA Employee Benefit Program contains features the are designed to assist your Human Resources team maintain compliance and mitigate the financial risk to your firm.  Call Dan Maniaci at 866-541-4824 for detailed information on the program.