Business Compliance
Business Compliance
Is your business in compliance? Learn more about ERISA, HR compliance, and ACA-mandated employer reporting requirements. We are here to support you.
ERISA Compliance
What is ERISA?
ERISA stands for the Employee Retirement Income Security Act of 1974. It is a federal law dealing with minimum standards for most voluntarily established pension and employee benefit plans.
Why Does ERISA Matter?
It’s the law. Most private-sector corporations, partnerships, and proprietorships, including non-profit corporations, must comply with ERISA regardless of size or the number of employees. While ERISA does not require an employer to establish a retirement or health benefit plan, it does require those who meet certain minimum standards.
Which Benefit Plans are ERISA Plans?
Employee benefit plans under ERISA include plans providing medical, surgical, hospital care, or any benefits provided in the event of an accident, sickness, disability, death. Also included are vacation benefits, training programs, scholarship funds, prepaid legal, or any benefit described in the Labor Relations Act of 1947.
In general, ERISA applies to the following:
Medical, Surgical, or Hospital Benefit Plans
HMO’s, PPO’s, Group Insurance
Health Reimbursement Arrangements (HRAs)
Flexible Spending Accounts (FSAs)
Dental Plans
Vision Plans
Prescription Drug Plans
Sickness, Accident, and Disability Insurance Plans
Group Life and AD&D Insurance
Long Term Care Insurance Plans
Unemployment Benefit Plans
Holiday Plans
Funded Vacation Benefits
Scholarship Plans
Business Travel Accident Plans
Day Care Centers
Severance Plans
What is a Plan Document & Why Does it Matter?
Plan Documents are required by ERISA to describe a plan’s terms and conditions related to its operation and administration. Each benefit plan that is subject to ERISA must have a written Plan Document. If an ERISA plan exists without the written document, it will be deemed out of compliance.
Plan documents are comprehensive and require tedious work. Don’t worry, you’re not alone. We’re here to help. Reach out to a compliance specialist today.
Affordable Care Act (Obamacare) Compliance
As a disclaimer, not all items will apply to your business. The best way to be sure is to contact our brokers for compliance requirements specific to your business.
These figures are updated year-to-year, so call us for the current compliance regulations and figures for 2024.
General Compliance
Employers cannot offer discriminatory coverage options.
Health Plan Administration
Waiting Periods cannot exceed the 90 day limitation
Orientation period prior to waiting period cannot exceed 30 days
Health FSA documents must not exceed the $2,600 limit
FSA Grace period vs $500 carryover provision must be specified
Participation requirements must be met according to each carrier
Full time definition must be 30 hours per week at most
Group Size is dependent on the average number of full-time employees plus full-time employees for the previous year
Commonly-owned companies are part of the calculation for accurate employer size determination
Converting employees to 1099 to avoid the mandate is not allowed
Review IRS Common Law employee rules to determine if staffing agency personnel would contribute to the overall employer size
Look-back measurement periods to employees hired as full time are not advised
Documents for Employees
Give employees DOL-mandated exchange notice to new employees within 14 days of hire
Deliver Summary of Benefits and Coverage (SBC) documents
Deliver 60-day notices of modification, if applicable
For employers with 50+ full time employees in 2016, prepare IRS form 1095-C (2017) for full time employees by 1/31/2018
Plan Design Changes
Explain metal tier coverage (Bronze, Silver, Gold, Platinum) to employees
Explain ACA-mandated essential health benefits to employees
Explain deductible and out of pocket maximums to employees
Ensure policies cover all essential health benefits
Ensure policies meet deductible and out-of-pocket maximums required to be ACA compliant
ACA Penalties
Applicable Large Employers may be subject to the Employer Shared Responsibility Provision. The following are penalties for not complying with it.
Penalty “A” 4980H (a)
1. No offer of minimum essential coverage (MEC)
2. Trigger: FT employee gets Premium Tax Credit (PTC) from Exchange
3. $2,260* x all FT employees minus first 30 FT employees
4. Calculated on a monthly basis at 1/12 of $2,260 or $188.33 per month
Penalty “B” 4980H (b)
1. Coverage is not affordable or does not provide minimum value
2. Trigger: FT employee gets Premium Tax Credit (PTC) from Exchange
3. $3,390* per FT employee receiving a Premium Tax Credit from the exchange
4. Calculated on a monthly basis at 1/12 of $3,390 or $282.50 per month
IRS Common Law Employee Rule
Since the ACA requires companies with 50 or more employees to provide affordable healthcare for their employees, employers are converting W2 employees to 1099 contractors. As a result, the Common Law Employee Rule was created.
The IRS follows three categories when determining whether an employee should be a W2 or 1099. Although there is a lot of room for interpretation, the following criteria is from the IRS website:
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?