On a Wednesday morning at 7:30 a.m., when most people are enjoying their first cup of coffee or catching up on headlines, I began my day meeting with Department of Labor (DOL) Employee Benefit Plan Investigators.
While that might sound a little intimidating at first, I was actually taking part in an informative meeting on the topic of “What to expect from an Employee Benefits Security Administration Investigation,” held by the Los Angeles chapter of the International Society of Certified Employee Benefit Specialists.
The conversation was led by a Supervisory Investigator in the Office of Enforcement who oversees more than 100 investigations from his office of Defined Contribution Plans and Health and Welfare Plans, and he left us with a number of pertinent points to consider.
One such takeaway that kept emerging—and should be considered by employers from the perspective of the DOL—is the concept that HR Professionals as Plan Sponsors have a fiduciary responsibility over the compliance of their plans.
One such takeaway that kept emerging—and should be considered by employers from the perspective of the DOL—is the concept that HR Professionals as Plan Sponsors have a fiduciary responsibility over the compliance of their plans.
The investigator specifically pointed out that we often think of this “fiduciary responsibility” in terms of our defined contribution retirement plans. This is most likely because it has to do with employees’ financial assets, however, it was stressed that this type of responsibility transfers equally to the role of health and welfare plans.
Another important point the investigator made was that the time they spend looking into health and welfare plans has quadrupled due to all of the recent Affordable Care Act (ACA) changes and requirements. In fact, investigating these types of plans has increased from 5 percent of their workload to nearly 20 percent.
Major areas where they are seeing violations include employers not having or providing a summary plan description, mental health parity act violations and low-level fraud due to employees abusing the system.
The investigator also discussed how they are seeing frequent occurrences of insurance carriers improperly denying member claims. While they obviously could not disclose who these carriers are, it is distressing to imagine that a carrier might deny a claim without even reviewing it just to push their insured member to go through an appeal process.
From the perspective of a broker, this is very disconcerting as we know our clients allocate a fair share of their budget every month for their employees to have insurance. The insurance company is not fighting to pay the maximum amount of claims they can, so it unfortunately falls on the shoulders of an organization’s leaders, an HR manager with a myriad of responsibilities and their broker.
That’s why it’s so crucial to have a broker that will actively work on your behalf.
It’s easy to push a fiduciary responsibility to the bottom of a priority list until you get that phone call from the DOL. Proactive prevention is key, and the last thing you want is to discover issues in the middle of a plan investigation.
Now, more than ever before in our industry, there should be a heightened sense of awareness around compliance and adherence to the various requirements of the ACA—as our in-house compliance team can attest!
Have questions or want to learn more about this? Let’s continue this conversation.
