What Business Owners need to know to protect your business, and provide peace of mind from potential $1,000/day fines
Whom is required to provide the 11 new 2013 ACA notices including the new Summary of Benefits
and Coverage (SBC):
All employers who offer an employer sponsored health insurance plan regardless of number of employees,
including private-sector corporations, partnerships, and proprietorships, including non-profit corporations
When do these required disclosures need to be provided to the employees?
All new hired employees and Health Plan renewals beginning/after September 23, 2012.
Why should employers care?
- Compliance is not optional, It is law effective September 23, 2012.
- These requirements apply to all employer sizes, not just 50+, 100+, or more
- Insurance Carriers do not provide these notices
- Employers can avoid costly DOL penalties
- Many states allow Participants and Beneficiaries to bring “bad faith” claims
- Up to $1,000/day fines
Below is a brief list of actual court cases, awards, and DOL fines related to employers not in compliance with ERISA laws pertaining to Welfare Benefit Plans:
|$4,540||Employer indifference and irresponsibility led to disclosure violations|
|$5,880||Failure to deliver SPD within 30 days of request. Minimum fine of $10/day|
|$9,800||Failure to provide LTD Plan Document; employer only provided SPD|
|$10,220||Excessive delay in providing Severance Pay Plan Document|
|$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|
|$17,475||Employer did not have SPD; only provided certificate of insurance to Participant; repeatedly insisted they were the same thing|
|$17,550||Failure to provide requested Plan Document and SPD to Participant|
|$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|
|$32,850||Delay, indifference, disregard in failure to provide copy of requested Plan Document to Participant|
|$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|
|$55,760||Incompetence and neglect delivering insurance contracts to Participants|
|$62,250||Failure to deliver SPD to Participant in manner required by DOL|
|$64,900||Provided SPD, but failed to provide requested full Plan Document|
|$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|
|$5,000,000||Claim wrongfully denied as experimental. State court jury trial, punitive damages|
What type of notices need to be communicated to employees beginning September 23, 2012?
- Summary of Benefits and Coverage (SBC)
- COBRA Rights
- Covered CA Exchange Notices
- Claims appeal procedures
- Women Health and Cancer Right Act
- Rescission of coverage rights
- Medicaid and the Children’s Health Insurance Program (CHIP) Offer Free Or Low-Cost Health Coverage To Children And Families
- Pre-existing conditions rights
- Eligibility for children extends to age 26
- Plus more…
What are common employer misunderstandings about these employer noticing requirements?
- The insurance carriers handle these notices
- These laws do not apply to me because I only have a few employees
- ERISA/Health & Welfare plans enforcement won’t happen to me
- This only applies to my 401K or retirement plans
- This only applies to companies with over 100 employees (i.e. 5500 filing)
- My Third Party Administrator (TPA), Broker/Agent, COBRA/FSA
Administrator does this.
What is ERISA and how does 2010 Health Care Reform law apply to it?
- ERISA (the Employee Retirement Income Security Act of 1974) is a Federal law which deals with employee benefit plans, and Welfare Benefit Plans (e.g., group insurance and other fringe benefit plans). The goals of ERISA are to provide uniformity and protections to employees.
- ERISA imposes certain reporting (to the DOL) and now because of the 2010 PPACA law provisions, beginning January 1, 2012 mandates 11 new disclosures (to Plan Participants) requirements on employers.
- ERISA compliance is enforced primarily by the Department of Labor (DOL). However, employee benefit plans may also be regulated by other government agencies, such as the Internal Revenue Service (IRS) and a state’s Department of Insurance. Failure to comply with ERISA can result in enforcement actions, penalties and/or employee lawsuits.
How do I know if you have already provided these notices?
- Review employee personnel files for copies of notices
- Review employee noticing log for date and time of when you provided these documents
- Contact your Insurance Broker to find out when they provided these notices to your employees
Let us help you with compliance now
By becoming a member of the Employer Health Coalition℠, you will have your Health Care Reform Employer Notices and Compliance completed for you. For select businesses between now and December 31, 2013, membership to the Coalition is free of charge. Not all businesses will be eligible.