Since becoming a major topic earlier this year,
many employers have worked with BASE® to become compliant with the Employee
Retirement Income Security Act (ERISA). The BASE® ERISA Wrap is designed to
help employers fulfill ERISA requirements for Summary Plan Descriptions (SPD)
and Plan Documents.
Here are a few points just to recap on what ERISA is and why
it is important to make sure you are in compliance.
What do employers need to do?
ERISA requires employers who are plan administrators of
benefit plans such as medical, dental, vision, life insurance, etc. to comply
with two important requirements.
1) Distribute and maintain Summary Plan Descriptions (SPDs) to
plan participants which accurately reflect the contents of the plan and which
include specific information as required under federal law.
2) Group health plans must be administered in accordance with a
written plan documents which must be made available to plan participants and
beneficiaries upon request.
Many employers mistakenly assume that insurance contracts,
certificates of insurance and benefits summaries fulfill the ERISA
requirements, but they do not. They lack the required or recommended provisions
that protect the plan and the employer.
What happens if employers don’t comply?
Lack of an SPD could also trigger a plan audit by the U.S.
Department of Labor. According to the Department of Labor’s
Strategic Plan for Fiscal Year 2014-2018, a random-sample of plans shows seven
out of ten plans fail to comply with some aspect of ERISA’s provisions. The
price of noncompliance in the event of a DOL audit is expensive at the rate of
$110 per employee per day fines for failure to have or provide an SPD or Plan
How can employers easily comply?
Call BASE® and
find out how you can become enrolled in the BASE® ERISA Wrap. BASE® will
provide all the necessary documents to make sure you stay in compliance with
ERISA and the Affordable Care Act.
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