Compliance is easy to do and easier to overlook. The cost involved in not having your benefit programs compliant with both the Affordable Care Act (ACA) and ERISA is staggering.
First Staff Benefits provides compliance tools on an al carte basis. We would love to write your benefits, but if you don’t need help with that, please at least review the information below:
Affordable Care Act Compliance: Although the individual mandate is going away on January 1, 2019, both employer mandates still exist. This means that if you are an Applicable Large Employer (ALE) you must continue to offer Minimum Essential Coverage (MEC) in both 2018 and 2019. In addition, you must offer that coverage to 95% of your ACA benefit eligible employees (working 30 or more hours per week). Should you elect to offer a Minimum Value Plan remember that you must also meet one of the affordability safe harbors. First Staff Benefits can manage both your product selection and implementation to keep you compliant.
1094/1095 Reporting: This reporting is still required. We would be happy to give you a quote to manage this process for you and relieve you of any liability for errors.
ERISA Compliance: This is regulatory requirement for all employers regardless of group size. The only exempt entities are churches and the federal government. Over 80% of the groups that we discuss ERISA compliance with are currently out of compliance. Depending on how your group plans are structured, there could be as many as 24 compliance points to meet, all of which have penalties for non-compliance. You will find the penalties for non-compliance in the Compliance Quiz below.
If you have questions or need help, just let us know. First Staff Benefits can manage all of your benefit plan compliance requirements.
What is Compliance?
What is ACA Compliance?
Are you aware that ACA Compliance is only HALF of your Compliance Requirements?
What is ERISA Compliance?
Are you Compliant?
Take our quick quiz below.
Welfare Benefit Plans Penalties for Non-Compliance
Aside from these penalty violations, there is the risk of potential lawsuits associated with lack of compliance.
Do you have a written plan document for your POP, FSA, HRA, or WRAP plan?
- NO – DOL penalty of $156 per day up to $1,566 per DOL request for document
Does the plan document give participants accurate information on the plan policies?
- NO – Penalty is liability for claims against plan
Do you provide a Summary of Benefits and Coverage required by the ACA?
- NO – Maximum penalty is $1,156 per failure
Do you distribute an ERISA approved SPD to the employee?
- NO – Penalty is $156 per day, per individual if DOL requests. Could trigger a DOL audit
Do you provide a copy of the SPD within 30 days of employee request?
- No – Penalty is $110 per day, per individual
Do you perform Eligibility, Contributions & Benefits, and Concentration Non-discrimination Tests for your POP?
- NO – Loss of favorable tax treatment for highly-compensated/key discriminated benefits
Do you perform Eligibility, Concentration & Benefits , Concentration, Dependent Care 55%, and Dependent Care 5% Owners Non-discrimination Tests for you FSA plan?
- NO – Loss of favorable tax treatment for highly-compensated/key/owner discriminated benefits
Do you perform Eligibility and Benefits Non-discrimination Tests for your HRA plan?
- NO – All or a percentage of amounts reimbursed to the highly compensated is includable as gross income
Do you leave the plan out of compliance after failed testing?
- YES – Penalty is $100 per day, per individual discriminated against, imputed income to prohibited individual (after plan year will require re-issue of W-2 and amended tax return)
Do you choose not to perform the required non-discrimination tests each year?
- YES – Penalty is $5,000 – $10,000 for willful noncompliance
Do you file a Form 5500 (when applicable) at the end of 7 months after the plan year ends?
- NO – Penalty is up to $2,940 per day, per benefit for late or incorrect filings
Do you comply with COBRA provisions?
- NO – IRS can levy tax of minimum $2,500 per beneficiary or $100 per day, per individual, per failure. ERISA notice penalty of $110 per day. Possible personal liability