Healthcare and welfare benefits have become increasingly important and complex, particularly because the Affordable Care Act (ACA) ushered in new regulations requiring guidance. As experts working with employee benefits exclusively, Employee Benefits Law Group is uniquely able to help you navigate this changing landscape.
We offer a full suite of services that ensure your health and welfare benefit plans are effective and compliant.
We help employers, their other advisors and plan fiduciaries design strong and cost-effective employee health and welfare benefit plans. We can help you with all aspects of plans, including design, documentation, compliance and tax issues.
We can help you manage the entire spectrum of employee welfare benefits, including:
- Major medical plans that are either fully insured or self-insured
- Other health plans, such as dental, vision, prescription, medical expense reimbursement plans (MERPs) and health reimbursement arrangements (HRAs)
- Retiree health plans
- Cafeteria or flex plans, including health flexible spending arrangements (FSAs) and dependent care assistance programs (DCAPs)
- Group-term life insurance
- Disability benefits
Options That Work
If you want or need to fund benefits through the use of trusts that qualify either as taxable ERISA trusts, nontaxable voluntary employees’ beneficiary associations (VEBAs) or governmental Code section 115 trusts, we can help. We know how to get you IRS and FTB tax exemptions for trusts that qualify as VEBAs, and we have deep understanding of the unrelated business taxable income (UBTI) rules for otherwise tax-exempt trusts.
Compliance Is Paramount
The ACA has statutory requirements that may apply to your employee welfare benefits. We will analyze your offerings to help you to ensure that you’re compliant with the complex controlled group rules, common control rules and affiliated service group rules.
“An interesting side effect of the ACA’s requirements is that employers are becoming familiar with the controlled group, common control and affiliated service group rules that treat all employees of related employers as if they were employed by a single employer. We assist employers in understanding how these complex rules affect not only their medical plans, but almost all of their other employee benefits as well.”
– Ken Ruthenberg, Employee Benefits Law Group Shareholder
Navigate the changing landscape of healthcare benefits.
FAQ: What Are the Reporting and Disclosure Obligations for Health & Welfare Plans?
ERISA requires each plan to file Form 5500 by the end of the seventh month after the end of each plan year (extensions of time are available) unless the DOL has granted an exemption to this requirement. Under the DOL’s regulations, certain employee welfare benefit plans are not required to file a Form 5500 (e.g., if the plan covers fewer than 100 participants at the beginning of the plan year and the benefits are paid either (i) exclusively from the employer’s general assets, (ii) exclusively through insurance contracts or an HMO, or (iii) through a combination of the two). If a Form 5500 is required and the plan is funded through a trust, formal plan financial reports and an independent qualified public accountant’s opinion may be required.
The failure to file a Form 5500 required by ERISA can result in a penalty imposed by the DOL of up to $2,063 per day with no maximum unless the penalty is excused based upon reasonable cause. Late filers may obtain relief from these penalties under the DOL’s Delinquent Filer Voluntary Compliance (DFVC) Program under which late forms can be filed subject to a fixed penalty schedule that is less onerous than the penalties that might otherwise apply.
Summary Annual Report (SAR)
Each year, the plan administrator of a plan that is not exempt from filing a Form 5500 must provide a summary annual report (SAR) to the participants within nine months after the end of the plan year. In addition, a totally unfunded plan, under which the benefits are paid solely from the general assets of the employer, where there are no employee contributions, is exempt from the SAR requirement even if the plan administrator must file a Form 5500 because there are at least 100 participants. The SAR summarizes the information provided on the Form 5500 and tells the participants how to obtain a copy of the Form 5500. The requirements for a SAR are set forth in the DOL’s regulations.
Summary Plan Description
ERISA requires that every plan be summarized in lay terms in a summary plan description (SPD). See FAQ 2 above for the SPD disclosure requirements. The willful violation of the requirement to provide SPDs, SARs and certain other information requested by participants to the participants can result in a fine of up to $5,000, imprisonment for up to 1 year, or both if the person convicted is an individual. If the person convicted is not an individual (e.g., it is a corporation), the fine can be as high as $100,000. In addition, the failure to provide certain information requested by a participant or beneficiary within 30 days after a request can result in a civil penalty of up to $110 per day. This amount is payable to the participant or beneficiary involved.
ACA Reporting and Disclosure Requirements
The Affordable Care Act requires that “Applicable Large Employers” distribute Form 1095-C to employees enrolled in the employers group health plan showing that the employer has complied with ACA rules on offering health coverage that meets minimum requirements. Form 1095-C must also be filed with the IRS. Employers with self-insured health plans must distribute and file Form 1095-B to enrolled employees and file the form with the IRS regardless of whether they are an “Applicable Large Employer.” We recommend checking with your legal advisor as the status of these rules has been in flux and there are additional requirements for employers that are part of a controlled group.