We are asked frequently about a list of DOL (Department of Labor) Audit items. Following is a current list of items examined from actual DOL audits in most circumstances. They can go deeper. But if you have this list, you are far enough down the road to have little to worry about.
Costly Fines
ERISA’s reporting and disclosure requirements can result in fines of $110 per day, per person, per violation for every plan participant who was covered under a single contract. That fine jumps to $200 for plan participants covered by a family contract. ERISA fines represent just one flag from the DOL auditor and can cost the plan sponsor dearly. Most fines for noncompliance under the ACA are not tax-deductible, either.
Since Brokers are licensed, clients often do not see the lines between ERISA and being the broker of record. Those lines are quickly disappearing. So, getting tuned up should be important to all benefit brokers.
Taking some time to catch up on the compliance rules and with your groups is a good idea ... now. Because, the fear of audits will push them into talking to someone with answers.
- Plan documents for each plan along with any amendments. (Content in all plan documents must comply with ERISA regulations.)
- Trust agreement (if any) and all amendments.
- Current SPDs.
- Form 5500 and accompanying schedules for most recent plan year and previous three years. (IF the plan has 100 or more participants.)
- Listing of all current service providers and those from the past three years.
- All current contracts with administrative service providers on the plan and most current fee schedules.
- All insurance contracts between plan and service providers.
- Name, address and telephone number of plan administrator.
- Sample HIPAA certificate of creditable coverage and proof of compliance with on-time issuance of COBRA notices.
- Notice of special enrollment rights and record of dates when notice was distributed to employees.
- Written eligibility criteria for plan enrollment.
- Documentation regarding all mandatory employee notices, i.e., ERISA Statement of rights, Women’s Health and Cancer Rights Act notice, etc.
- Copy of most recent monthly bill for premiums (if any) from insurance carrier(s).
- Copy of check, wire transfer or other method of payment for insurance premium (if any).
- Enrollment form(s) for the plan.
- Employee handbook (if any).
- All documentation of claim adjudication and payment procedures.
- Fidelity bond (if any).
Costly Fines
ERISA’s reporting and disclosure requirements can result in fines of $110 per day, per person, per violation for every plan participant who was covered under a single contract. That fine jumps to $200 for plan participants covered by a family contract. ERISA fines represent just one flag from the DOL auditor and can cost the plan sponsor dearly. Most fines for noncompliance under the ACA are not tax-deductible, either.
Since Brokers are licensed, clients often do not see the lines between ERISA and being the broker of record. Those lines are quickly disappearing. So, getting tuned up should be important to all benefit brokers.
Taking some time to catch up on the compliance rules and with your groups is a good idea ... now. Because, the fear of audits will push them into talking to someone with answers.
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