Human resource professionals have a tough job. There are numerous topics you must commit to understanding. Whether its talent management, time and labor tracking, payroll, or benefits compliance, your human resource employees must manage a lot. And not only do HR professionals have to manage each of these areas of, but they also must keep up-to-date on any way these areas update and change.
Because, when it comes to the human resource field, the one thing you can guarantee is that things are guaranteed to change. Whether its IRS updates, healthcare compliance, or employment law; there’s almost always a pending change to address in the human resource industry.
In this article, we’ll tell you about seven employee benefits compliance issues you should keep in mind as 2019 winds down. Keep reading to learn about these compliance issues, and how your firm can address them in 2020.
The first employee benefits compliance issue to keep in mind is employee eligibility. Eligibility is defined differently among different plans, and sometimes depending on the type of contributions. As a plan sponsor, you need to ensure employees have met the eligibility requirements before you enroll them in the plan and contributions begin.
Also, you need to understand plan materials usually need to be sent to a larger group than your active employees. So, review your distribution list to ensure that all materials are appropriately communicated to all eligible individuals, not just your employees.
6. Employee Leave Management
Paid leave is one of the most coveted employee benefits amongst virtually all generations. But there are several compliance pitfalls, employers need to be aware of when implementing a paid leave program. It’s vital you provide the same amount of paid family leave for both men and women if you offer it.
Similarly, you must take care to differentiate when an employee can use disability for a pregnancy and when they can use bonding leave. Because disability coverage applies only to the medical condition of recovering from childbirth, it shouldn’t be included with bonding leave.
5. Participant Elections
When a participant enrolls in a new plan or changes their contribution amount, the plan sponsor needs to make sure these changes are made as soon as administratively possible. But you should monitor for changes throughout the year, not just at open enrollment. Check periodically to ensure you implement changes and elections in a timely and correct fashion.
4. Track Voluntary Benefits
Voluntary or enhanced benefits are employee benefits that can be offered as exempt from ERISA. But if you offer these benefits, pay close attention to how you describe and market what administrative tasks you perform for these benefits. One misstep can trigger the voluntary plan safe harbor which will subject these plans to one or more of ERISA, COBRA, HIPAA, or other compliance legislation. Plus, make sure you keep updated on which voluntary benefits your employees enroll in every year. You don’t want employees paying for a benefit they’re not receiving or vice versa.
3. Proper Reporting/Notices
You must ensure all necessary reports and notices are given to plan participants, employees, and service providers at the proper time. Similarly, make sure all notices are up to date with current laws and regulations. But you can’t just send these notices and expect your employees to understand. Educate your staff about what notices they should expect to receive and when.
Take care when preparing and distributing these communications to ensure the information included is correct. Failure to properly review these communications could lead to:
- Potential taxes, penalties, and participant lawsuits
- Potentially being unable to enforce a plan change
- Potentially being unable to reduce/eliminate benefits
2. Update Employee Risk Policies
First, take another look at your current employee code of conduct policy. Make sure it’s up to date with today’s trends and issues and worded correctly. Also, double-check to ensure your policies consider new and emerging workplace scenarios. Additionally, keep in mind your policies should reflect that different positions within your company grant different physical and informational access. Therefore, different positions should represent different risks to your organization and employees.
1. Review Provider Contracts
As a plan sponsor, you should review all contracts with all service providers, at least once a year. Make sure you know what responsibilities your service provider takes care of and what you, as the plan sponsor, are expected to handle. It’s also vital you review these contracts to know about any fees that are charged or have changed in the past year.
Failing to properly review your service provider agreements can lead to direct liability under such laws as ERISA. An inadequate contract review could leave you, the employer, needlessly unprotected from ERISA or other liabilities. Some important contract provisions include:
- Representations regarding the standard of care
- Audit rights
- Contract termination rules
- Dispute resolution
Maintaining a clean compliance record is nearly a full-time job by itself. So, don’t rely on a single human resource professional to handle all their responsibilities plus your company’s employee benefits compliance. The Olson Group now provides HR Consulting as a standalone offer. Let us help your HR team share some of the burdens and ensure your company becomes and remains compliant.
Contact our compliance expert, Roxy Kolev, at HRconsulting@theolsongroup.net or 402.289.1046 and get started ensuring your company’s compliance, today!