Are you compliant with the new Health Care Reform / ERISA Compliance?

As new health care reforms are rolled out, organizations must take action to ensure they remain compliant with the latest health care rules and regulations or face severe fines and penalties.  David Rine Insurance underwrites all major carriers and, by simply using our agency, you can be asured your company remains compliant-free of charge.  The Department of Labor is beginning to audit companies at random to enforce the new ERISA law, which now applies to groups of ALL SIZES, and reports show the IRS is hiring 16,000 new agents to enforce the Affordable Care Act.  For this reason, you must be compliant.

 Summary of Benefits and Coverages (SBC):

Summarizes the benefits and coverages provided in the plan, including explanations for insurance terms. The document must be written in terms an average participant can understand.

  • All participants of any benefit plan must receive this document
  • The insurance company must provide this document but it is the EMPLOYER’S responsibility to make sure an SBC is distributed to each plan participant
  • Fines for non-compliance are $1,000 per day, per affected individual.

Summary Plan Description (SPD):

A document that must be provided to plan participants, which explains the plan’s benefits, procedures, and ERISA rights.

  • GROUPS OF ALL SIZES are now subject to ERISA and the must comply with this law.
  • It is the full responsibility of the EMPLOYER to furnish and distribute SPD’s.
  • Fines for non-compliance or failure to distribute this document is $110 per day.

Summary Material Modification (SMM):

Document which is provided to participants when there is a modification to their benefits plan. Instead of going through the tedious process of providing a new SPD, a short summary of the change is given to each participant.

  • Again, this is the responsibility of the employer to provide
  • Fines can amount to $110 per day

Form 5500:

IRS form that must be filed annually for groups that have over 100 participants.

  • Fines for failure to comply are up $1,100 per day

Summary Annual Report:

Document that summarizes form 5500 and must be distributed to plan participants.

  • Fines for failure to comply are up to $110 per day.

Fines for Non-Compliance

Many employers think “It’s not going to happen to me.” However, it happens all the time. Here is a brief list of court cases, awards, and DOL fines related to employers not being in compliance with ERISA laws pertaining to Welfare Benefit Plans:

$4,540 – Employer indifference and irresponsibility led to disclosure violations
$5,215 – Employer inattentive in providing Life Insurance Plan Document and refused to furnish copy of Form 5500 to Participant until ordered to by court
$5,880 – Failure to deliver SPD within 30 days of request. Minimum fine of $10/day.
$10,560 – Late delivery of SPD to employee after 3 written requests, max. penalty $110/day
$11,550 – Failure to provide SPD after written notice
$13,750 – Failure to provide SPD upon written request. Maximum penalty for employer’s unresponsiveness and lack of excuse. $110/day for 125 days.
$17,475 – Employer did not have SPD; only provided certificate of insurance to Participant; repeatedly insisted they were the same thing
$18,400 – Failure to deliver SPD on request; $25 x 736 days; without prejudice or bad faith
$26,100 – Failure to respond to document request over very long time
$34,540 – Failure to provide participation agreement between employer and LTD carrier prejudiced Participant’s ability to establish enrollment date
$37,650 – Requested documents provided at widely spaced intervals
$50,000 – Failure to file Form 5500
$55,760 – Incompetence and neglect delivering insurance contracts to Participants
$62,250 – Failure to deliver SPD to Participant in manner required by DOL
$86,500 – Failure to file complete and accurate Form 5500
$105,840 – Plaintiff’s attorney’s fees in LTD claim case; award unknown
$159,000 – Late entrant; employer gave employee wrong waiting period & ordered to pay claim
$241,000 – Failure to provide SPD to Participant
$243,000 Failure to provide SPD to Participant prior to termination
$5,000,000 – Cancer treatment claim wrongfully denied as experimental. State court jury trial, punitive damages
$8,692,000 – Bad faith claim denial. Punitive damages. State court jury trial
10 Months Prison – Plus $46,844 fine; failure to file 5500; diverting employee contributions
Award N/A – Court reversed Administrator’s decision to terminate disability payments based on a de novo review of the facts.

Contact David Rine Insurance today for more information on how we will help you stay compliant with new health care reforms.