Compliance Checklist (100+ Participants)

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Eustacia Chapman
5 years ago
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1 Compliance Checklist (100+ Participants) 1. Are IRS Form 5500 s being filed for all welfare benefits that have over 100 participants or that pays benefits from a trust? 2. Is one consolidated 5500 being completed or separate ones for each benefit? If company is completing a consolidated 5500, is the wrap plan document current and up-to-date? Does it include up-to-date HIPAA, COBRA and other language? Is an updated wrap plan SPD being distributed to all existing participants as well as new participants? (Note: for most Smith & Downey documents prepared before July 2010, updating will be required) 3. Does the Section 125 document and Wrap Document comply with the 2009 regulations (no retroactive amendments, non-discrimination requirements, etc.) 4. Has the Wrap Document been updated with new Section 125 language? It is currently in proposed language but can be counted on for finalization. a. Dependent Care FSA plan may allow terminated employees to spend down their DC FSA balance during the remainder of the plan year b. FSA elections may be evergreened each year c. Payroll deductions that span 2 plan years for dental and vision? d. Amendments must be signed before they are effective e. Additional non-discrimination testing procedures f. Plus many other considerations 5. Is a Summary Annual Report (SAR) being given to employees in 100+ groups or plans with trusts? 6. If any plan over 100 participants has a trust, is the trust being audited annually? 7. If all employees in the controlled group are not treated exactly the same, is yearly non-discrimination testing being done on the Section 125 plan, any self-funded medical plan, the medical FSA s and the group term life plan? (Note that, even if all employees in the controlled group are treated exactly the same, "usage testing" is required for any Dependent Care FSA and for the "key employee concentration test" portion of the 125 tests.) 8. Does the company have different waiting periods for benefits to begin or different employee deduction levels for benefits for different levels of employees? It should be tested for discrimination purposes. 9. For the owners of an S-Corporation (2% or greater only), LLC, LLP or Sole Proprietor, be sure they are not included in the pre-tax Section 125 plan and do not participate in flexible spending accounts.

2 10. HEART Act of 2008 consideration for qualified reservists called to military duty to withdraw FSA funds early. 11. If there are multiple companies/subsidiaries covered under a single, self-funded health plan, be sure they are a controlled group to avoid creating a MEWA (Multiple Employer Welfare Arrangement). 12. If the plan has employee contributions, does employer have a fidelity bond in place? (You need a fidelity bond for all retirement plans AND health and welfare plans with employee contributions.) If there is not a Trust and all employee deductions are taken on a pre-tax basis then a fidelity bond is not needed. NOTE: are STD and LTD deductions taken post-tax? 13. Does the company have retirees or other people not on the payroll covered under the benefits plan? 14. Does the company have any type of special situations in place that would need to be signed off by an insurance carrier? 15. Is the Initial COBRA notice being mailed to employees and spouses when they first join the COBRA eligible plans? Are they being mailed to the employee/spouse s house and HR keeping a copy of meter mailed envelope in the file for proof? If it isn t being done, do one big mailing and then maintenance from that point forward. 16. Does the company maintain COBRA election notices and election forms, unavailability of COBRA notices and COBRA termination notices, and provide them when required and keep detailed records of compliance? 17. Does the company maintain written HIPAA privacy policies and procedures for complying with HIPAA privacy regulations? Has the Policy & Notice been updated to include the 2010 HIPAA HITECH language? 18. Does the company send the HIPAA privacy notice to all employees since 4/1/04? Notice must be given to each new participant and again once every 3 years. Notices need only go to plan participants and the every 3 year rule notice can be a simple reminder notice unless the HIPAA policy has changes. 19. If the employer has an employee benefits website, be sure to post the company s HIPAA Privacy Notice on it. 20. Does the company maintain written procedures for providing HIPAA Certificates of Coverage and provide Certificates when required (automatically and on request)?

3 21. Has the company complied with the HIPAA security laws (if the company handles electronic PHI)? 22. Does company have a Business Associate Agreement in place with all vendors that have access to private health information for a health plan? 23. Medicare Part D Notice must be distributed by November 15, 2005 to all employees and covered dependents that are Medicare eligible. In addition, all new employees/dependents to the plan must also receive a notice. Annual notices should also be distributed on an ongoing basis. One notice mailed to Employee name and Family is sufficient. 24. Medicare Part D Notice to the Centers for Medicare and Medicaid Services needs to be submitted on-line one time per year within 60 days after the plan year ends. " 25. Does the company send the Women s Cancer Rights Act letter to employees once per year to participants? Notice should also be sent to newly eligible employees. 26. If the company has a pre-existing condition limitation on its medical plan, it needs to distribute a notice of Pre-existing condition limitation for this plan to all employees before they join the medical plan and a second notice if a pre-existing condition limitation is to be imposed. 27. A Notice of Special Enrollment Rights should be given out to employees when they first participate or decline to participate in the health plan and during each later open enrollment period. In addition, this Notice should be updated with special CHIP language effective April 1, CHIPRA Notice must be sent to plan participants on the 1 st day of the plan year beginning after 2/4/10 or 5/1/10, whichever is later. For employers with January 1 st plan years the notice must be sent by 1/1/11. Notice must be distributed once per year, 1 st class mail to ALL employees whether eligible for health coverage or not. The fine is $100 per day. 29. Michelle s Law effective plan years beginning on or after October 9, This new law requires group health plans offering dependent coverage to allow college students who become seriously ill to leave school without losing coverage under their parent's plan for up to 12 months. 30. If the medical, dental, vision plans allow for domestic partner coverage, be sure the employee payroll deduction is post-tax for this portion of the premium (except where domestic partners is a Code Section 152 dependent). NOTE: federal definition of spouse is a person of the opposite sex and married per the resident state s law. If neither of these are met then the test should be done to see if spouse qualifies as a dependent under Code Section 152.

4 31. If a plan covers non-dependent domestic partners, is the value of the coverage taxed to the employee and are employee contributions after-tax? Non-dependent children should also have the same set up as well. 32. If the company paid life insurance benefit is over $50,000, is the company addressing imputed income back to the employee on the W-2 for the coverage over $50,000? 33. Does the company have liability insurance in place for Human Resource errors for ERISA fiduciary liability? 34. Does the company have employees that work (not reside) in any of the following states that require mandatory state short-term disability insurance: NY, NJ, CA, RI, HI and Puerto Rico? 35. Does the company maintain written procedures for reviewing possible Qualified Medical Child Support Orders? 36. Does the company have any office locations or employees in San Francisco or Massachusetts that require health insurance coverage in various forms? Is the MA HIRD form being collected for those employees that waive the company s health coverage? Is the company filing the on-line annual notice with MA? A form 1099HC must be issued to eligible MA employees in January of each year. 37. For Maryland based companies with fully insured plans, has the dependent child age limit been increased to 25? Has the Wrap Document been altered to reflect this change as well? 38. STD & LTD plans that transfer from 100% employer paid to 100% employee paid must have employees sign an annual election form in order to bypass the IRS 3 year rule to allow for benefits to be tax-free to the employee. If the annual election form is not sign, then the benefits received will be pro-rated as taxable and tax-free under the 3-year look back rule. 39. Health Care Reform for 2011: a. If plan is grandfathered then SPD s, enrollment forms, benefits communication materials should include the grandfathered notice prior to the 1 st day of plan year. b. Amend plans to cover dependents to age 26. Wrap Document and all SPD s need to be updated. c. Amend plans to remove lifetime cap on essential benefits. Wrap and all SPD s need to be updated. d. Amend plans to remove pre-existing condition limitations for children under age 19. Wrap and all SPD s need to be updated. e. Over-the-counter drugs all FSA, HSA, HRA plan documents need to be

5 amended to adhere to new rules effective 1/1/11. f. Amend plans to remove rules regarding rescission of benefits. g. Non-grandfathered plans amend plans to cover preventive services without cost sharing, establish claims appeals process added to existing rules and new external appeals, fully insured plans must eliminate discrimination in favor of highly compensated employees (postponed) and allow direct access to OB/GYN care and emergency services without preauthorization. h. Special Enrollment notices must be given to all employees prior to open enrollment to allow a 30-day enrollment opportunity to add adult children up to age 26 and for employees/dependents to re-join the medical plan if they had previously reached the lifetime maximum benefits. Must be given prior to 1 st day of plan year of PPACA. i. Special Notice to non-grandfathered plan participants regarding patient protection rules. Must be given prior to 1 st day of plan year of PPACA and language must be included in SPD s and all materials describing medical benefits. j. Written notice of any rescission must be provided at least 30 days in advance to participants k. Non-grandfathered plans must provide a culturally and linguistically appropriate notice to participants regarding the new appeals process and their options for assistance. 40. Medical plans must be reviewed and amended as needed to ensure compliance with the Mental Health Parity and Addiction Equity Act, effective for plan years beginning after October 3, Plan documents and schedules of benefits must be updated as needed. 41. Medical plans must comply with the HIPAA health status nondiscrimination regulations and any wellness programs that provide financial incentives must meet the wellness program requirements under those regulations. Schedules of benefits and wellness program features should be reviewed to determine if they comply with these requirements. 42. Medical plans and wellness programs should be reviewed to ensure they comply with the Americans with Disabilities Act. Any wellness programs (including health risks assessments) that impose a penalty for failing to participate should be reviewed to make sure they do not violate ADA restrictions on asking disabilityrelated questions or requiring medical exams. 43. Dependent eligibility requirements should be accurately reflected in plan documents and SPDs and enforced in practice (periodic dependent audits may be helpful). 44. If the employer offers voluntary benefits to employees that: 1) have employer contributions; 2) are endorsed by the employer; or 3) are programs under which

6 the employer receives some compensation (not including reasonable expenses), then the benefits will be subject to ERISA. Therefore, review all voluntary benefits for possible need to comply with ERISA, HIPAA, COBRA and health reform requirements. (Note that any actions by the employer beyond allowing the insurer to market the program to employees and to collect premiums from employees may be viewed as an endorsement by the employer.)

Compliance Checklist

Compliance Checklist Note: This checklist is a brief listing of some of the compliance requirements that apply to health and welfare benefits under federal law. It is not intended to describe all compliance requirements or