Employers are dedicating much time and energy ensuring compliance with the multitude of new requirements imposed by the Affordable Care Act (ACA) – understandably so. ACA compliance is uncharted territory, and miscalculations carry the potential for stiff financial penalties. However, employers should take care to remain focused on overall plan compliance, specifically ERISA regulation, as the attention on employer-sponsored group health plans from various federal agencies will only increase.
ERISA applies to group health and welfare plans, and while employers are typically well aware of the strict requirements this law imposes upon employee retirement plans, the same careful attention has not always paid to its applicability to health plans. Historically, employers were not as incentivized to comply with ERISA in health plans. The Department of Labor (DOL) focused heavily its investigations and audits on retirement plans, particularly during the economic crisis that began in the late 2000s that resulted in the devastation of many employee retirement accounts. Now, employers can except a shift in this sharp focus to group health plans, as the DOL, along with the IRS, is tasked with enforcing various provisions of the ACA.
A primary requirement of ERISA is the need for various plan documents, including a summary plan description (SPD), pursuant to which the plan must be administered. The SPD must be written in a manner that the average plan participant can understand. It must be made available to every participant and reflect the most comprehensive, current plan information. Importantly, the SPD will also contain some ACA-related disclosures, such as notices of grandfathered status and designation of a primary care provider, and plan eligibility requirements. When the DOL investigates a health plan, the SPD is one of the first documents requested.
ERISA encompasses several other federal laws such as COBRA and HIPAA, all of which impose additional duties upon plan sponsors. Employers must keep up with the required notices and disclosures associated with these laws. For example, the General COBRA Notice, the Notice of Special Enrollment Rights, and the ACA’s Exchange Notice must be made available to employees and participants, while still others must be provided upon the occurrence of particular events. Employers should be able to demonstrate that these notices and disclosures are timely provided.
While the ACA has shined a spotlight on benefit plan compliance, employers should not lose focus of the overarching need for compliance in all aspects of the group health plan. ERISA and its related federal laws impose on employers various duties, reporting requirements, and standards of conduct. As always, consult with a trusted team of benefit advisors in order to effectively meet the obligations imposed by the ACA and beyond.