ERISA Compliance is Not an Option, it is the Law!

ERISA (the federal Employee Retirement Income Security Act) requires employers who are plan administrators of their group Health & Welfare plans to comply with specific requirements or risk potential penalties and possible audits. Northeast Professional Planning Group, Inc. (NPPG) strongly recommends that all employers take the appropriate steps to comply with ERISA and avoid the possibility of costly audits and penalties.

What steps does an employer need to follow to comply with ERISA?

  1. Group health plans must be administered in accordance with a written Plan Document which must be made available to plan participants and beneficiaries upon request.
  2. Maintain and distribute the plan’s Summary Plan Description (SPD) and Summary Annual Report to plan participants which accurately describes the contents of the plan and includes specific information as required under federal law.
  3. Employers with more than 100 employees will be required to file an annual Form 5500.

Did you know?

Late reporting can result in penalties of $2,063 per day!

Until recently, the requirements have not been actively enforced; however, a significant source of revenue for funding the Affordable Care Act (ACA) is expected to be generated (estimated more than $1 billion in penalties for 2016) from ERISA audits of employer Health & Welfare plans. Due to the need for capital, the IRS and Department of Labor (DOL) are now combining forces to vigorously enforce ERISA compliance. Non-compliance with ERISA requirements can result in serious penalties, fines, and even employee lawsuits. Non-disclosure penalties start at $147 per day per violation per employee and late reporting can result in penalties of $2,063 per day. The DOL is aiming to audit all United States businesses (with one or more employees) within the next five years.

See sample DOL notification of an audit.

Compliance with the disclosure portion of the law requires employers to maintain and distribute a plan document, Summary Plan descriptions (SPD’s), Summary of Material Modifications (SMM’s), and Summary Annual Report (SAR) for their Health & Welfare plans. Carrier documents in conjunction with a formal ERISA plan document do satisfy the ERISA requirements. However, distributing the insurance carrier documents alone does not satisfy the ERISA requirements.

NPPG Fiduciary Services assists employers with complying with the law by providing the required Health & Welfare plan documents and Form 5500 preparation services. NPPG also supplies its plan document clients with a comprehensive online HR Library. This one-stop solution assists in streamlining HR functions to help clients concentrate on what is important – running their business.

Group Insurance Services Include:

  • Health and Wellfare Plan (WRAP) Document – updated annually
  • Ensure employee benefit program is compliant with changing regulations
  • Preparation of the following documents
    • Plan Document
    • Summary Plan Description (SPD)
    • Summary Material Modification (SMM)
    • IRS Form 5500 (for employers with over 100 eligible participants)
    • Summary Annual Report (SAR) if required
  • Compliance updates
  • Access to a Human Resource Compliance Library
  • HR Apps & Tools
  • HR Forms
  • HR Training

 Grow Your Company with the Right Partner! Call NPPG at 732.758.1577 or contact us here.