NEW YORK, Dec. 27, 2018 /PRNewswire/ -- Clarity Benefit Solutions discusses the importance of ERISA compliance.
The Employee Retirement Income Security Act (ERISA) is a federal law that protects qualified retirement plans such as 401(k) plans, profit sharing, and pension. ERISA also regulates welfare benefit plans, which include insurance plans for health, group life, dental, disability, and other fringe benefit plans. ERISA compliance is enforced by The Department of Labor.
Most employee benefit plans as well as retirement plans must comply with ERISA mandates, regardless of their size. Examples include group health plans, vision/dental plans, group term life insurance plans, insured disability benefits, prescription drug plans, and HSAs/FSAs.
Section 402 of ERISA mandates that all employee benefit plans be established and maintained per a written plan document that clearly outlines certain basic information about the plan, such as: the fiduciary who is authorized to administer the plan, the source of plan contributions, procedures for amending and terminating the plan, and the allocation of responsibilities for the operation of the plan between the employer and the insurance carrier or third-party administrator. Additionally, every plan must be detailed in a document that provides participants with a concise plan summary.
This plan summary is extremely important for ERISA compliance and must include key information, such as: the plan name, the employer's federal tax identification number, the contact information for the plan administrator (name, address, and telephone number), the plan year, the plan number for annual reporting purposes, the source of plan contributions, a claims procedure, information about plan trustees, information regarding eligibility for plan participation, name and address of the plan's agent for service of legal process, and a statement of ERISA rights.
ERISA mandates that additional information be provided to participants in group health plans—including information regarding COBRA continuation coverage and HIPAA pre-existing condition exclusions. Employers are legally obligated to provide each plan participant with a free copy within 30 days of the participant request. Failure to do so may result in a $110 per day penalty.
Employers who fail to comply can face fines of up to $1,100 per day for each late Form 5500. Late delivery of an SMM, SAR, or SPD to a participant may result in fines of up to $110 per day.
About Clarity Benefit Solutions: Clarity Benefit Solutions FSA Company provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
SOURCE Clarity Benefit Solutions