I was just having lunch with an Employee Retirement Income Security Act (ERISA) attorney who told me that there have definitely been some increases in DOL audits. The attorney presently has three audits to review and finds the increase in audits to be very odd. They target small groups, anywhere from 100 life and under, and the DOL is asking for unexpected information. A typical audit used to assess things like Forms 5500, summary plan descriptions and Consolidated Omnibus Budget Reconciliation Act notices. Now, with health care reform increasing as 2014 draws closer, there are things that employers have needed to do since 2011 for which notices will increase when 2014 hits. Today, the DOL is asking to see notifications that employers told the employees that dependents are eligible for health care coverage up to age 26. There are similar things that seem like no big deal, and employers think the carriers are notifying employees in an open enrollment meeting. The DOL, however, needs to know in writing that the employers told the employees. There are increasingly more critical notices that people probably think are not a big deal. Lifetime max needs to be gone, and companies have to have notified employees about it. There is also an annual notice that needs to be made with regard to the Women’s Health Care Cancer Act. There are more notices that seem to be taking more of employers’ time and do not seem like a big deal, but they need to be done. The DOL is sending a laundry list of questions. I have seen the letter. There are at least 50 different things that the DOL wants to see that employers have done.
There has definitely been an increase in random audits. Small groups are probably in a panic when they see that letter because they probably think the carrier or the broker is handling all of the notices for them. It is a laundry list of approximately 50 different items. The DOL wants to know little things like how the employer notified employees about dependents being eligible for health insurance to age 26 and how many different Health Insurance Portability and Accountability Act certificates of credible coverage they have issued. The DOL wants to know about items that the carrier is handling for employers but for which the employer is ultimately responsible with regard to notifying employees, so there is probably a panic when employers get that notification and see the list of 50 different small items and various notices. With health care reform, there are more notices that employers are going to have to provide. There is an increase in paperwork and notifications to employees, and employers should not assume that their carrier is handling those responsibilities for them. Employers have to take on those responsibilities.
We have a new client, so the first thing we always do is our due diligence to make sure that all of their compliance is in place. We have a checklist of things to make sure that the notices that should be given out to new hires are done. We assess things like the client’s processes for open enrollment and procedures during a time of leave. We ensure that all of these different notices are in place. If clients do not have them in place when we take them as a new client, we ensure that they have the various forms and notices so that they are in compliance. That is how we handle our clients. The best practice is to basically do an audit by reviewing a checklist of all the various items that need to take place to be compliant with ERISA, Family Medical Leave Act and other various laws.
