Employer Compliance Reminders

Based on the benefits you offer to your employees, there are several compliance obligations that need to be addressed.

The November and December months are a busy time of the year for employee benefits since a significant number of plans renew on or around January 1st. While several employers are deciding which plans they want to offer to their employees during this time of the year, compliance obligations should also be top of mind. Below are some helpful reminders. 

Plan Documents. Employers should make sure they have appropriate plan documents in place. This includes the Summary of Benefits and Coverage (SBC) required under the Affordable Care Act (ACA) for health insurance plans and some Health Reimbursement Arrangements (HRAs). Additionally, when employees can pay for benefits with pre-tax dollars, a Cafeteria Plan document must be adopted. Lastly, all benefits subject to the Employee Retirement Income Security Act of 1974 (ERISA) must have a summary plan description (SPD) with customized and detailed information disclosed.  

Non-Discrimination Testing. Some benefit plans require non-discrimination testing to be conducted. The non-discrimination testing is necessary to ensure highly compensated and/or key employees are not eligible for or receiving benefits more favorably than other employees. Non-discrimination testing applies to Cafeteria Plans, self-insured medical plans, Health Reimbursement Arrangements (HRAs), Health Flexible Spending Accounts (Health FSAs), Dependent Care Flexible Spending Accounts (DC FSAs) and group term life insurance. 

Medicare Part D Reporting. Employers must report information to the Centers for Medicaid and Medicare Services (CMS) within 60 days of the start of each plan year. The reporting lets CMS know the creditable coverage status of prescription drug plans, including those embedded with a health insurance plan. Medicare-eligible employees are subject to a penalty if they delay enrollment in Part D unless they have creditable drug coverage elsewhere. The reporting form can be accessed and submitted by clicking here, and it only takes about ten minutes to complete.   

COBRA General (Initial) Notice. A COBRA General Notice must be provided to new plan participants within 90 days of enrolling in coverage. This includes an employee who elects a new or different benefit that is subject to COBRA, as well as new dependents who will now be covered under a plan that is subject to COBRA. As a best practice, employers should provide the COBRA General Notice to every eligible employee.  

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