As I have traveled throughout the Southeast to lead seminars and client meetings relating to benefits compliance, the most popular topic other than the Affordable Care Act has been ERISA. To some degree, ERISA is a compliance concern of every employer in America other than exempt churches and governmental entities. ERISA has gotten much attention over the past five years, but it still remains largely an unknown factor for health and welfare plans despite the fact that the substance of the law has not changed in many years.
Here is the good news: basic ERISA compliance for employers is fairly simple. The nuts-and-bolts of ERISA, and the basics of what employers need to know and do for standard benefits programs, can be effectively communicated in 30 minutes. The most common response, and the one I enjoy most, after I present a beginner or intermediate course on ERISA is, "I never realized that was all it is." The basics of ERISA for health and welfare plans include four categories:
Claims and Appeals Requirements
Plan Documents (including Summary Plan Descriptions)
Reporting Requirements (Form 5500s)
The truth is that most employers who are working with quality carriers and providers are generally ERISA compliant. For employers with 1-99 employees, the compliance action list is short. For employers with 100+ participants in group benefits, the ERISA considerations are greater, primarily because of the Form 5500 requirement and the increased need for Wrap SPDs or Consolidated Wrap SPDs.
These topics are not overly painful, but they need to be addressed and confirmed. If you are an employer, an annual review of your benefit programs and ERISA issues is easily and efficiently done. If you are an advisor, talk to your clients about ERISA now. You would certainly rather the client hear it from you than a competing entity. As with other topics, for employers and advisors, it is an area where a small amount of effort on the front end can save a massive amount of effort on the back end. I have been involved in multiple DOL audits of health and welfare plans, and the employers in general compliance have easily and cleanly survived.
Thanks for reading, and best wishes for a prosperous and enjoyable 2015.
PS – To answer a common question, ERISA stands for the Employee Retirement and Income Security Act of 1976. And, in the words of an attorney colleague, “We should never forget that the ‘E’ in ERISA stands for Employee, not Employer.”