NEW YORK, April 10, 2019 /PRNewswire/ — ERISA wrap document provider, Clarity Benefit Solutions, discusses the importance of ERISA compliance.
The Employee Retirement Income Security Act (ERISA) is a federal law that safeguards qualified retirement plans, including pensions, 401(k) plans, and profit-sharing programs. This law also regulates welfare benefit plans, such as insurance plans for group life, health, dental, disability, and supplementary fringe benefit plans. The Department of Labor enforces ERISA compliance through audits that can happen at any time, sometimes with no warning.
It is vital that employers’ employee benefit and retirement plans comply with these ERISA mandates, no matter how large or small the company is. Group health plans, dental and vision plans, insured disability benefits, HSAs and FSAs, and prescription drug plans are some examples of plans that must meet ERISA’s terms.
According to Section 402 of ERISA, all employee benefit plans must be established, and maintained, per a written plan document that clearly defines specific plan basics, such as the fiduciary who is authorized to manage the plan, the source of plan contributions, measures for amending and terminating the plan, and the distribution of responsibilities for the operation of the plan between the employer and the insurance carrier or third-party administrator. Plus, every plan must be outlined a document that provides participants with a detailed plan summary, which is extremely important for ERISA compliance. It is vital that the following key information is present in the summary: the plan name, the employer’s federal tax identification number, the contact information for the plan administrator (name, address, and telephone number), the plan year, the plan number (for annual reporting purposes), the source of plan contributions, a claims procedure, information about plan trustees, content regarding eligibility for plan participation, the name and address of the plan’s agent for service of legal process, and a statement of ERISA rights.
In addition, to maintain ERISA compliance, employers need to include information about COBRA continuation coverage as well as HIPAA pre-existing condition exclusions. Employers are legally obligated to distribute a free copy of this information to each plan participant within 30 days of the participant request. Failure to do so may result in a $110 per day penalty. And, employers who fail to meet these requirements can face fines of up to $1,100 per day for each late Form 5500.
About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
SOURCE Clarity Benefit Solutions