PrimePay Broker Webinar Series October 22, CE Approved for One (1) Hour Credit in CA #310252

Transcription

1 PrimePay Broker Webinar Series October 22, 2014 CE Approved for One (1) Hour Credit in CA #310252

2 Requirements for Today s CE One (1) hour CE Credit is approved in CA # You must be registered as an individual to receive credit do not be viewing this as a group for credit purposes You may experience difficulties if viewing on a tablet or mobile device Actively participate when prompted 100% Attendance Sheets must be completely filled, signed and returned no later than the EOD on Friday, October 24 th Lastly take notes and ENJOY! PrimePay LLC 2

3 Course Agenda ERISA 101 Benefits & Employers Subject to ERISA Key ERISA Requirements Guiding Your Clients Through it All PrimePay LLC 3

4 Prepare to answer this question. LET S TAKE A POLL QUESTION PrimePay LLC 4

5 Key Definitions ERISA 101 PrimePay LLC 5

6 ERISA 101 Most legal concepts regarding employee benefit plans comes from: 1. The IRC and/or 2. A set of federal laws under Title 29 of the United States code, generally under the jurisdiction of the DOL. Title I» Employee Pension Benefit Plans» Employee Welfare Benefit Plans PrimePay LLC 6

7 ERISA 101, cont d For most employee benefit plans, ERISA requires: Detailed disclosure to covered individuals (employees and beneficiaries) Detailed reporting through Form 5500 A strict fiduciary code of conduct on plan sponsors and administrators ERISA also creates a federal mechanism for enforcing rights and duties and preempts a large body of state law. PrimePay LLC 7

8 ERISA 101, cont d Three Basic Elements of an ERISA Welfare Benefit Plan 1. There must be a Plan, Fund or Program 2. That is established or maintained by an employer 3. For the purpose of providing one or more benefits to participants and beneficiaries PrimePay LLC 8

9 ERISA Plan Plan Sponsor ERISA Plan Administrator Participants & Beneficiaries Named Fiduciary Other ERISA Fiduciaries Insurance Companies Third-Party Administrators Trustee PrimePay LLC 9

10 Plan Document Requirement Applies to each plan an employer maintains No hard-and-fast rules for # of plans; generally, employers are free to determine the number of plans it has for ERISA compliance purposes Bundling ERISA & non-erisa benefits together in the same plan doesn t make the non-erisa benefits subject to ERISA (generally) PrimePay LLC 10

11 Anyone acting in the capacity of performing ERISA fiduciary functions is a fiduciary under ERISA o Exercise discretionary authority over management of Plan o Exercise discretionary authority over Plan assets o Render investment advice o Exercise discretionary authority over Plan administration ERISA 101: Fiduciary Duty PrimePay LLC 11

12 General decisions made by a Fiduciary o Sponsoring one type of benefit Plan versus another o Amending a plan; changing Plan options o Requiring employee contributions o Terminating a Plan or a portion of a Plan o If TPA, does it have discretionary authority? ERISA 101: Fiduciary Duty PrimePay LLC 12

13 Every Fiduciary must be bonded Protects the Plan from losses due to fraud or dishonesty Must be in place at the beginning of the Plan year At least 10% of the funds handled during the prior reporting year Subject to minimum of $1,000 and maximum of $500,000 ERISA 101: Bonding Requirement PrimePay LLC 13

14 Prepare to answer this question. LET S TAKE A POLL QUESTION PrimePay LLC 14

15 Which Plans and Employers must comply with ERISA? BENEFITS & EMPLOYERS SUBJECT TO ERISA PrimePay LLC 15

16 Plans That Must Comply VISION DENTAL PRESCRIPTION ACCIDENT MEDICAL HOSPITAL HEALTH FSA PrimePay, LLC 16

17 Medical, surgical or hospital care Dental & Vision Plans Health FSA HRA Health Reimbursement Arrangement o Exceptions May Apply for: Wellness & EAP Programs Sickness, accident, disability, death or unemployment Severance Insurance Policy Voluntary benefits under IRC 125 Plans that must comply with ERISA PrimePay LLC 17

18 Generally, all employers will be subject to ERISA Exemptions: o Government o Church o Programs maintained solely to comply with state law requirements for workers compensation, unemployment compensation, disability insurance or Plans maintained outside the US for non-resident aliens Employers that must comply with ERISA PrimePay LLC 18

19 Required Documentation, Disclosure & Notices & Annual 5500 Filing Requirement KEY ERISA REQUIREMENTS PrimePay LLC 19

20 Written Plan document Document varies with type of benefit Insured benefits require a Wrap or Umbrella Document Contains: o Available benefits o How they will be funded o Standard of review for benefit decisions o Named Fiduciary o Plan amendment and termination procedures o Required provisions for COBRA, HIPAA, Special Enrollments, USERRA, etc. Required ERISA Documentation PrimePay LLC 20

21 Probably the most important document? The Summary Plan Description To the following: Participants covered under the Plan(s) COBRA QBs Parent or guardian of a child under a QMCSO Spouse of a deceased retiree who remains entitled to benefits Within 90 days after a participant first becomes covered under the Plan No small plan exception Required ERISA Documentation PrimePay LLC 21

22 Summary Plan Description Summary of Material Modification Summary Annual Report generally, 100 employees Summary of Benefit Coverage GHPs subject to ACA Additional Notices for: o COBRA o Claim procedures o HIPAA o WHCRA & QMCSO o ACA Notices and Disclosures PrimePay LLC 22

23 Form 5500 filed annually with the DOL Applies to each ERISA plan; with some exemptions: o Small Plans with fewer than 100 covered participants at the beginning of the Plan year o Applies to small unfunded, insured or combination of Plans Annual 5500 Filing Requirement PrimePay LLC 23

24 Deadline? o Last day of the seventh month after the end of the Plan year (i.e. 7/31 for calendar year Plans) o 2 ½ month extension can be granted through Form 5558 o Filed electronically through EFAST2 o Schedules A, C, I (small), H (large) and G (certain prohibited transactions) Annual 5500 Filing Requirement PrimePay LLC 24

25 Prepare to answer this question. LET S TAKE A POLL QUESTION PrimePay LLC 25

26 Failure of non-compliance reduced using an ERISA checklist with your clients GUIDING YOUR CLIENTS THROUGH IT ALL PrimePay LLC 26

27 Failure of Non-Compliance No specific penalties for failure to prepare a written Plan document or SPDs ERISA s general enforcement provisions allow suit to be brought where no document exists, criminal penalties per conviction could be $100K or imprisonment, fines can be upwards of $500K if against an entity Failing to provide a copy of the SPD within 30 days of request - $110 per day Failure to distribute an SBC: $1,000 per failure PrimePay LLC 27

28 Failure of Non-Compliance, cont d ERISA Fiduciary Breach Personally liable for any damages caused to the plan because of breach Other penalties may apply (equal to 20% of the amount recovered by the DOL in a settlement) and/or criminal penalties Form 5500 $1100 per day for each failure; no statute of limitations DOL offers a Delinquent Filer Voluntary Compliance Program PrimePay LLC 28

29 Common ERISA Penalties to Avoid $10,560 Penalty Failure to send a summary plan description on a timely basis after the plan participant made three written requests. Kasireddy v. Bank of America $17,475 Penalty Employer failed to produce an SPD to participant thinking that a Certificate of Insurance was enough. Sunderlin v. First Reliance $62,250 Penalty Employer failed to provide a summary plan description to the participant in an appropriate manner required by the DOL. Leyda v. Allied Signal 29 U.S.C. 1132(c)(1) states the following: Any administrator... who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. PrimePay, LLC 29

30 Prepare to answer this question. LET S TAKE A POLL QUESTION PrimePay LLC 30

31 ABC Company Bring it to Life CASE STUDY PrimePay, LLC 31

32 ABC Company Under a cafeteria plan employees can elect: o Major Medical ABC pays 75% or the premium, employee responsible for 25% o Dental Insurance ABC pays 75% of the premium, employee responsible for 25% o HRA Arrangement to reimburse 50% of the deductible o Optional Health FSA o DCAP 100% ER paid GTL, AD& D and LTD STD paid from general assets (not insured) Voluntary insurance (cancer, critical illness, etc. EE paid) PTO paid from general assets Educational Assistance Program paid from general assets PrimePay LLC 32

33 What Plans Are Subject to ERISA? Cafeteria Plan POP (documents required) o No Major Medical o Yes Dental o Yes Health FSA o Yes DCA (documents required) o No GTL, AD&D, LTD o Yes STD o No PTO o No Voluntary o Yes PrimePay LLC 33

34 Key ERISA Requirements for ABC Plan documents for each plan Summary Plan Description (SPD) Group health plans SBC (includes HRAs) Amendments changing plan terms (SMM) Form 5500 Filing Summary Annual Report (SAR) Fiduciary responsibilities Fidelity bond to cover fiduciary Welfare plans trust accounts Claim procedures must be established Group Health Plans subject to COBRA &HIPAA W-2 reporting DCA and potentially ER sponsored health coverage? PrimePay LLC 34

35 Sample ERISA Actions ERISA Mega Plan ABC Benefits Plan Combines all insurance policies, designates ABC as the ERISA plan administrator and ERISA plan number assigned. Can include non-erisa plans. Wrap Document combined with policy booklets as SPD because certificates of coverage do not have all required ERISA information Section 125 POP document for pre-tax payroll deductions (not subject to ERISA SPD issued to EEs) Allocation policy for participant plan assets added to mega-wrap document described in wrap document Health Insurer handles HIPAA compliance and annual disclosures (WHCRA, etc.) PrimePay LLC 35

36 Sample ERISA Actions Written description of the tuition reimbursement, although not subject to ERISA SBC provided by carrier, but not for the HRA plan SBC created for HRA plan Over 100 participants need to file Form 5500 for mega wrap (501) with all schedule As, health dental, LTD, GTL, AD&D SAR Over 250 W-2s need to report the aggregate cost of ER sponsored medical coverage for each EE PrimePay LLC 36

37 Sample Fees, Testing & Refunds HRA PCORI Fees, Nondiscrimination Testing Section 105(h) FSA 3 Nondiscrimination Tests Potential Premium Refund due to MLR PrimePay LLC 37

38 Prepare to answer this question. LET S TAKE A POLL QUESTION PrimePay LLC 38

39 PRIMEPAY RESPONDS PrimePay, LLC 39

40 Benefits of the PrimePay ERISA Service Plan Document Personalization and Preparation Summary Plan Description (SPD) Summary of Material Modification (SMM) Annual Notices and Disclosures Form 55oo Filing Summary of Annual Report (SAR) PrimePay, LLC 40

41 Why PrimePay? Satisfy ERISA Requirements Simplify the Amendment Process Eliminate Documentation Risks Administrative and Technical Administrative Support Independent of Carrier Selection (Carrier Agnostic) ERISA Guarantee ERISA Experts with 15+ years of experience All-Inclusive Fees PrimePay, LLC 41

42 Perform Due Diligence with Your Clients PrimePay, LLC 42

43 What is your next move for your clients? Communicate Communicate Communicate Do you offer any health and welfare benefits? Do you have a Plan Document? Do you have an SPD and have distributed them to your employees? Have you ever amended your Plan(s)? Have you ever filed Form 5500 and are you considered a large employer? Have you ever been subject to a DOL audit? PrimePay LLC 43

44 Thank you for your attendance!! Attendance Sheets must be completely filled, signed and returned no later than the EOD on Friday, October 24 th LET S MAKE ERISA COMPLIANCE "EASY FOR YOUR CLIENTS! Chris Beaty Area Sales Manager cbeaty@primepay.com Victoria Hirsch-Boada Channel Manager vhirsch-boada@primepay.com Questions? Broker Concierge concierge@primepay.com Thank you LISI for coordinating this webinar today!! THAT S EASY. 44