Companies that want their employees to feel appreciated and rewarded can use a strong benefits package to this end. Employee benefits also provide much-needed support for the financial future of an employee and have an impact on an employee’s physical health. While a benefit to the company and its employees, there is a concern of benefits compliance that must be taken into account.
What Is Employee Benefits Compliance?
Federal and state laws govern how a company must do business and treat its employees. With employee benefits laws, there are steep penalties for the company that falls out of compliance. Being out of compliance means violating laws like HIPPA, COBRA, ERISA, FMLA and more. Unemployment insurance, social security and workers’ compensation are also legally required, with things like life insurance, paid time off or disability benefits being offered at the discretion of the company.
The Department of Labor carries the authority to investigate compliance through audits, but employees can bring litigation against a company if they feel their rights have been violated. Lawsuits are costly, and companies can face both civil and criminal penalties depending on the violations. Common complaints include:
- Reduction in promised benefits
- Denial of benefits
- Retaliation against employee
- Breaching fiduciary duties
- Failing to provide mandated notices
- Withholding or changing benefits of the plan
What Are Some Factors To Consider When Offering Benefits To Employees?
Though it’s difficult to remove all liability concerns when offering employee benefits, there are several things that can help a company stay in compliance.
Affordable Care Act Compliance
If your company is required to offer group health coverage, you can stay in compliance by offering the minimum essential coverage to 95% of the full-time employees and any of their dependents. You must also make sure the coverage provides minimum value, and any health coverage offered needs to be filed annually with the IRS.
Employee Retirement Income Security Act of 1974
ERISA requirements apply to group health insurance as well as discretionary programs like disability or life insurance. All participants must have a Summary Plan Description, and there are timelines for issuing this plan. The plan must also follow a written plan document and should you have over 100 participants, the plan must be filed with the IRS each year.
Health Insurance Portability and Accountability Act of 1996
HIPAA compliance deals with the security and privacy of your employee’s health information. Notices of privacy practices must be distributed upon enrollment or upon request or material revision, and the company must have safeguards in place to ensure the information is protected. Employees must be notified if a breach occurs.
There are many different elements that make up a benefits package, and compliance in each area is crucial to avoiding litigation. Automated software or employee benefits compliance services are helpful tools for reducing the risk of human error and simplifying benefit administration.
About Brooks, Todd & McNeil
Since 1839, the independent agents at Brooks, Todd & McNeil have been pleased to offer our community the best and most affordable policies from a variety of providers. Our dedicated facilitators are ready to put their 75 years of combined experience to work on your claims. To learn more about our products and services, contact us today at (800) 448-4567.