Bulletin Board Magazine 2018 Volume 1

What is ERISA?

WHAT IS ERISA? by Stosh Gepp & Matt Matey

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www.mccuecaptains.com 732-842-0444

W

hat is ERISA? It stands for Employee

of the employer, not the insurance carrier. Failure to comply could result in significant fines and penalties, even employee lawsuits. The Department of Labor (DOL) is increasing audits and they know a large percentage of employers are not prepared. The following

that govern health and welfare benefit plans under ERISA. Plan Document - Every employer must have a written plan document in place for each benefits plan offered to employees. The employer must maintain the Plan document and make it readily available for inspection by the DOL at all times.

1. Summary Plan Description (SPD) **This is NOT the same as the Summary of Benefits and Coverage (SBC) provided by the insurance carrier. All participating employees must receive a copy of the SPD within 90 days of enrollment. New plans require distribution within 120 days after the benefit becomes subject to ERISA. 2. Summary of Material Modification (SMM) - Anytime there is a material change to any benefits plan, all participating employees must receive a copy of the SMM within 210 days after the plan year-end in which the change occurred. If there is a reduction in covered services or benefits, an SMM must be provided no later than 60 days after the date of reduction. 3. IRS Form 5500 - You must file a Form 5500 with applicable schedules every plan year if you have 100+ participating employees. The form must be filed within 7 months after the plan year-end. 4. Summary Annual Report (SAR) - Completed by employer and distributed to all participating employees for any plan that files Form 5500 (100+). The SAR must be received within 9 months after the plan year-end, or 2 months after Form 5500 is filed. by specific regulations concerning their health and welfare benefit plans. ERISA's strict guidelines call for employers to submit detailed and time-sensitive documents to the government and plan participants. These requirements are solely the responsibility Retirement Income Security Act and is a federal law that requires employers to abide

breakdown will give you an idea of the disclosure and reporting requirements

5. Medical Loss Ratio (ACA) - Determines if a rebate is a plan asset under the ERISA

According to the DOL, the ERISA compliant SPD is the single most important document an employer must provide their employees. As an employer, you need to be aware of your exposures in order to prepare for a potential audit. Being compliant is not “Optional” ...It's the Law! The McCue Captains Agency specializes in assisting their clients with all aspects of insurance and benefits planning. Compliance plays a major role here. It’s important that your broker partner takes on these responsibilities so you can continue running your business and making it profitable. Matt Matey is a Chartered Benefit Consultant (CBC) at the McCue Captains Agency. Along with Stosh Gepp, he specializes in designing customized insurance programs and employee benefit compliance for all of their clients. They are NOT commodity brokers, instead Matt and Stosh serve as a true extension of their clients’ businesses, building long-term partnerships with them. Sources: U.S. Department of Labor U.S. Department of Labor Audit Process TASC

plan and adds those terms to the plan document/SMM so they can retain a

Bulletin Board | 14 | www.shorebuilders.org all of this, but don't be alarmed. Many employers are out of compliance due to... • Lack of awareness • Insurance carrier documents thought to be compliant • Confusion due to complexity of regulations • Prior limited enforcement prorated portion of the rebate equal to the percent of premium paid by the employer. Each employee must receive a rebate that is proportional to the premium amount paid by that enrollee. 6. ERISA and Healthcare Reform Notices - Annual notices must be provided to eligible employees based upon the status of any new or renewed group health plan. Employer must distribute notices on or prior to the first day of the group health plan effective date. 7. Discrimination Testing - Section 105(h) of the IRS Code requires all self-insured health plans perform discrimination testing. Employers must maintain test results for inspection by IRS/DOL for 8 years. 8. This may be the first you are hearing about

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