As an employer, the decision to offer employee benefits is left completely up to you. However, your market will often dictate the need. The quality of any company is largely determined by the skill level of its employees. High-quality employees tend to go where they feel they are valued the most. That value is shown in the compensation that they receive for their work. If you want to compete at the highest levels of your industry, then offering employee benefits is often required in order lure in the kind of workers that will allow you to do that.
Why Prospective Hires Value Health Insurance
While retirement savings and profit-sharing or pension plans are certainly attractive benefits, the benefit that most potential hires are looking for is group health plan coverage. Given the high cost of health care, your willingness to offer an employer-sponsored plan may be just what’s needed in order to bring the best, brightest employees into your organization. The lower cost of monthly premiums offered by group health plans is highly coveted, yet at the same time, it’s a general expectation of those looking to put their professional talents to work. While offering this particular benefit is highly recommended, it is also not something you should do without first realizing the unique obligations that it places upon you.
Understanding Your ERISA Obligations
Once you choose to offer your employees group health plan coverage, you become subject to the rules and regulations set forth by the Employee Retirement Income Security Act. An important distinction should be made here in that ERISA does not make group health plan coverage mandatory; it simply stipulates how you are to administer the plan. The guidelines established by the Act set standards regarding:
• Your conduct as the plan administrator
• The funding of the plan
• Any potential discrimination in the distribution of plan benefits
• The standards for filing insurance claims and appeals
• The need to disclose plan information to participants
• Accountability standards for documentation and reporting
If you’re like most employers, then your expertise doesn’t lie in health insurance administration guidelines. Thus, you’ll likely outsource the services related to your group health coverage to a third party. It is important that you remember, however, that by outsourcing those tasks, you still aren’t necessarily freeing yourself from any liability issues related to it. Whoever assumes discretionary control over your plan is considered its fiduciary. Your role of fiduciary doesn’t change if you simply outsource the tasks related to the plan’s administration. As long as you choose to determine who among your staff is eligible for plan benefits, you maintain all of the fiduciary responsibilities.
Who Handles ERISA Enforcement?
This puts you on the hook if ERISA violations are ever brought up. The Employee Benefits Security Administration is the agency over ERISA enforcement. An allegation of an ERISA violation will typically prompt an EBSA investigation. However, the outcome of these investigations typically only results in the reprocessing of claims or reimbursement of any plan participant’s losses. In some cases, fines may be assessed, yet the priority of the EBSA is typically to avoid litigation. If you comply with any corrective action that it suggests, then your financial losses due to any violations may be kept at a minimum. However, if you choose to dispute the claims against you or not adhere to any suggestions given regarding restitution, then the EBSA will typically escalate your case to officials with the Department of Labor. While the complexities involved in ERISA enforcement make it difficult to provide a detailed description of the entire process here, it suffices to say that remaining compliant with employment benefit standards offers mutual benefits to you, your employees, and the EBSA. Should you need advanced training on what those standards are in order to guarantee compliance, there are several resources available to you. Staying out in front of any potential employee health care benefit issues not only spares you the potential headache of having to deal with accusations of violations, but it also helps engender a sense of confidence within your workforce in your ability to deliver the advantages promised through benefit packages.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.