The Four Key Stumbling Blocks on Reporting and Disclosure

Clients hold Brokers accountable for keeping them abreast of their ERISA Compliance responsibilities. It’s become a daunting task for brokers to keep track of every minute detail for their clients. To help steer away from mistakes, we’ve become adept at avoiding these 4 key stumbling blocks to successful reporting and disclosure:

1. Forgetting to remind clients to update plan documents with legislative wraparound plan amendments and corresponding summary of material modifications (SMM) annually or whenever federal laws and regulations affect the provisions in the plan documents.

Wrangle’s ERISA Desk provides important alerts on this matter and current updates for plan documents for those who retain our services for this essential task. In fact the ERISA Desk just issued the 2018 legislative amendment and SMM templates for wraparound plan documents before November of this year.

For more information reach out to Emily Marr, from our ERISA Desk: emarr@wrangle5500.com

2. Not tracking the benefit plan structure as well as the establishment of Plan Documents during a Mergers and Acquisitions.

Form 5500(s) often go unfiled for the company that has been acquired. This oversite often leaves the acquiring company with potential penalties and audits from the DOL. We avoid this by ensuring diligence in reporting and disclosure throughout the M&A process without clients.

3. Not including self-funded benefits in the Form 5500 report.

Self-funded benefits are not required to be reported on the Schedule A. However, general assets need to be noted within the Form 5500 report. The proper benefit code needs to be included and it is important to include the enrolled participants as part of the Plan.

Also if self-funded benefits are handled through a TPA with check-writing ability, such as those for the FSA Healthcare plans, particular attention needs to be given to see if a trust plan is necessary for the funding and fiduciary responsibilities.

4. Leading a client out of compliance if EAP, Wellness, telemedicine, and/or voluntary benefits were Not Included in the 5500.

Generally-speaking, if EAP, wellness, or telemedicine care is provided in some fashion the benefit would be deemed ERISA reportable. This is even the case if a vendor provides the service and not an insurance carrier. True, the vendor may balk at providing a Schedule A., but if the EAP is part of the Employee Welfare benefit plan then Schedule A-like documentation from the vendor is necessary.

Wrangle is accustomed to vendors creating impasses for this type of issue. Our Data collections team has found workarounds for this situation that keep the 5500 on track for encompassing all necessary benefits of the ERISA Plan.

Many voluntary benefits are also part of the Employee Benefit Plan.  Even if the employee pays 100% of the premium, if the employer/Plan Administrator endorses the Benefit, then the benefit could be part of the Plan and be required to be in the Form 5500

What could constitute endorsing:

• Selecting an Insurer
• Negotiating the terms and linking coverage to Employee Status
• Using Employer’s name/Associating policy with other Employer’s policies (i.e. OE material).
• Recommending policy
• Saying ERISA applies
• Conducting more than permitted payroll deductions
• Allowing Employees to pay premium through ER’s Cafeteria Plan on a pre-tax basis
• Assisting employees with claims and disputes.

If you have any concerns about your ability to avoid these stumbling blocks to proper reporting and disclosure than contact us.