by Elizabeth Kay, Compliance and Retention Analyst with AEIS, Inc.
Every few years there is a change in administration at the Federal level, and with each change often comes a change in policy, change in areas of focus, and sometimes a change in revenue streams. For example, under the Obama Administration the Department of Labor and IRS were looking to increase revenue by performing audits on businesses of all sizes for compliance with Federal Law such as Employee Retirement Income Securities Act (ERISA) and the Affordable Care Act (ACA).
Under the current administration we have not seen as much activity on behalf of the DOL, but we have continued to see collection letters from the IRS for Applicable Large Employers who are being asked to pay a penalty for not offering health coverage to their employees as required under the ACA.
Since the current administration is showing less interest in overseeing businesses and how they administer their health and welfare plans, you may be asking why you still need to be audit ready. Why do you still need to dedicate time and resources to documenting your plan benefits and notices that have been distributed to participants, if no one is going to care?
Well the answer is two-fold really. One you need to do it because it is the right thing to do for your employees and plan participants. Second, you need to do it because the next administration may care and may come knocking on your door looking to make sure you are doing what the law says you should be doing. The statute of limitation for ERISA compliance is 6 years. This means that the Department of Labor can look back in your records to a time of a previous administration and require you pay penalties for non-compliance.
In addition, if you make it policy to maintain the proper records and administration habits now, then you spend less time trying to make up for it later on when someone finally cares again about what you are doing (or not doing).
Our dedicated Compliance Officer, Elizabeth Kay conducts mock audits for our clients for DOL and IRS compliance as they relate to health and welfare plans to uncover any areas where they may be lacking or missing information so they can shore up the problem areas in case of a future audit. If you are not sure you are ‘audit ready’, give us a call today at 650.348.6234 or email at ElizabethKay@AEISAdvisors.com
Disclaimer: Any compliance related information in this blog is intended to be informational and does not constitute legal advice regarding any specific situation. Should you require further compliance assistance or legal advice, please consult a licensed attorney.