Persistent action on legislative compliance is critical to your organization. But compliance goes beyond filing specific paperwork by specific deadlines. It means understanding how laws and regulations apply to your employee benefits offerings and how to minimize the costs associated with noncompliance in order to maximize your organization's resources to ensure continuous operations, attracting and engaging employees, and overall organizational wellbeing.
Compliance Continuity is a monthly publication designed to help your organization sustain the total wellbeing and engagement of your workforce, pursue your business goals, and help you achieve better results by providing ongoing benefits and HR compliance guidance, key considerations, and action steps. While your best is finite, your better is never finished. Check out the action steps below to help you proactively plan a path toward better compliance during annual enrollment.
- Modify. Notify. Distribute. COBRA Qualified Beneficiaries can present communication challenges during annual enrollment. These individuals are entitled to receive enrollment materials and make changes in benefits in the same manner as active participants. However, you may be required to modify enrollment materials for COBRA Qualified Beneficiaries to avoid creating confusion over information for benefits excluded from COBRA continuation coverage (such as life insurance and other non-health benefits), and to communicate clearly Qualified Beneficiaries' rights and obligations. What changes does your organization need to make to customize the annual enrollment materials for COBRA Qualified Beneficiaries?
- Adopt. Review. Update. The terms of every cafeteria plan must be set forth in a written plan document. Plan document failures can arise if a plan fails to adopt a plan document or if the plan document has not been updated to reflect changes in the law, benefits offered, permissible election change options, or other similar terms impacting your cafeteria plan operation. Annual enrollment is an ideal time to implement plan documents where none exist or to review your current plan document to ensure it accurately reflects the benefits offered. When was the last time you reviewed and updated your plan documents?
- Remind. Remind. Remind. Annual enrollment is the optimal time to remind employees of key components of their benefits and their obligations as participants. For example, employers can use annual enrollment to remind employees to update their beneficiary designations. Additionally, employers should remind employees about the rules related to dependent children who have or will age out of your various benefit plans. For example, dependents must be covered until age 26 under your medical plan, but your accidental death and dismemberment policy may cut off coverage at an earlier age. Finally, if certain benefits, such as life or disability insurance, require evidence of good health or other certification, you can use the annual enrollment period to remind participants of their obligation to provide the required evidence in a timely manner. What reminders do your employees need during annual enrollment?
- Collect. Document. Report. Information on enrollment and waivers of coverage is essential to tracking offers of coverage for multiple purposes. For example, waivers of coverage are essential to track offers of coverage for reporting and disclosure requirements under the Patient Protection and Affordable Care Act (PPACA). Additionally, if an employee is offered contributory coverage (e.g., supplemental life insurance, disability, dental, vision, voluntary benefits) it is a good practice to obtain a signed waiver from an employee who does not elect coverage. If a claim occurs in the future, the signed waiver is proof that the employee declined the offer of coverage. In many instances, enrollment vendors provide this information to employers. Annual enrollment is a good time to review your systems and relationships with enrollment vendors to ensure your organization is capturing the necessary information that will assist you with reporting to the IRS accurately and timely and protect your organization against claims. What information does your enrollment vendor collect that allows you to fulfill your reporting requirements and obtain proof of waivers of coverage?
- Review. Confirm. Notify. Some legal notices are required to be distributed on an annual basis, such as the Children's Health Insurance Program (CHIP), the Women's Health and Cancer Rights Act (WHCRA), and Medicare Part D notices. Many such notices can be included with your annual enrollment materials. However, it is important to consider whether your enrollment materials are distributed in a permissible method. For example, while electronic notice may be easier and less expensive, certain notices have specific delivery requirements before they may be distributed electronically, such as prior consent or the necessity of computer use as part of an individual's job duties. What revisions can you make to your annual enrollment materials to communicate all required annual notices to participants?
This is a preview of Compliance Continuity. For five more considerations regarding Annual Enrollment, contact your Gallagher representative or click here to subscribe and receive the full version of Compliance Continuity.
Compliance is a series of actions, not a final destination. As a trusted advisor, Gallagher has developed this Compliance Continuity series to help you pursue a path through employee benefits compliance issues as part of an overall continuing compliance plan. Employers should carefully evaluate their health and welfare plans to determine if they are in compliance with both federal and state law. If you have any questions about one or more of the compliance destinations listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support employers in their compliance efforts, please contact your Gallagher representative.
The intent of this analysis is to provide you with general information. It does not necessarily fully address all your organization's specific issues. It should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be addressed by your organization's general counsel or an attorney who specializes in this practice area.