Employee benefit packages can often be the deciding factor in whether a prospective employee accepts a job with your company or goes with a competing offer. As such, employers know that offering a top-tier benefits package is vitally important to attracting top-tier talent. However, effectively selecting and managing benefits packages can be a complicated and daunting process due to the large body of federal compliance requirements that regulate them. While these regulations are essential for ensuring the fair and standardized treatment of employees nationwide, they can also be dense and intimidating if you have no prior experience navigating them. The Department of Labor is responsible for overseeing these regulations and ensuring that companies are adhering to them and properly documenting compliance.
Employee Benefits Compliance Checklist
Affordable Care Act (ACA) and Department of Labor (DOL) compliance is integral to a well-run business and employee benefits department. If you fail to meet government-mandated requirements, which vary depending on company size and change as you grow, you could be at risk of significant penalties.
Ensuring you adhere to ACA and DOL guidelines allows you to rest easy, knowing regulatory agencies and unnecessary fines are being kept at bay. By taking the right precautions, you are saving yourself from fines that can amount to hundreds of thousands of dollars, protecting your business from a hit it may not be ready to take.
Here is a basic checklist you can use to ensure employee benefits compliance:
The Affordable Care Act
The ACA sets health care coverage requirements for employers based upon the size and structure of the company. Companies with 50 or more full time equivalent employees are required to provide benefits to 95% or more of their full-time employees. Companies with fewer than 50 full time equivalent employees still have to observe ACA compliance regulations, but do not have the same filing or reporting requirements.
Consolidated Omnibus Budget Reconciliation Act
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that provides employees leaving employment with the ability to continue their health insurance coverage temporarily. Employers with 20 or more employees are required to participate in COBRA. Laws for businesses with fewer than 20 employees vary from state to state, but some states do require that these businesses participate in COBRA.
Department of Labor and Centers for Medicare & Medicaid Services
There are numerous Department of Labor regulations that employers must maintain compliance with, including wages, safety, anti-discrimination, and a multitude of benefits. You can find a full summary of these statutes on the Department of Labor’s website.
Employers are also responsible for maintaining compliance with all federal regulations related to Medicare plans and reporting compliance to the Centers for Medicare & Medicaid Services (CMS).
Employment Retirement Income Security Act
The Employment Retirement Income Security Act (ERISA) is a federal law that was passed in order to protect employees and their dependents, and requires employers to maintain compliance by distributing required notices and disclosures, and maintaining payroll records. ERISA is closely tied to both COBRA and the Health Insurance Portability and Accountability Act (HIPAA).
Health Insurance Portability and Accountability Act
HIPAA is a federal law that was passed to govern how protected health information (PHI) is handled. PHI is essentially any personally identifiable information contained within medical records. This is important for protecting patient privacy, as well as guarding against identity theft. HIPAA privacy rules are crafted to protect this sensitive information from unauthorized disclosure, while still ensuring proper information sharing abilities for optimal patient care. HIPAA violations are a major concern, as they often result in hefty fines or even prosecution.
Internal Revenue Service
There are multiple IRS requirements affecting employers who offer pre-tax benefits packages to their employees. These pre-tax benefits are subject to regulations from Section 125 of the Internal Revenue Code. In order to provide your employees with healthcare plans that make use of pre-tax salary deductions, you must have a Section 125 plan document.
Speak To An Experienced Employee Benefits Firm
New City Insurance knows ACA and DOL compliance inside and out. We make employee benefits compliance easy for our clients, growing right along with you as new compliance requirements come in with each new stage of your business development.
Deliver industry-leading health benefits your employees expect and deserve, without breaking the bank. Providing quality, affordable health benefits to your employees within a company budget is a unique challenge and a fine balancing act. A benefits package that falls short of employee expectations can lead to recruitment and retention issues, holding your company back from success. At New City Insurance, we recognize that no one solution fits all. That is why our expert advisors are dedicated to finding customized health benefit solutions for your business. We will help you deliver packages you can be confident in – and that your employees will appreciate.