📜 Benefits Compliance Essentials
Employee benefits are governed by a complex web of federal laws. Compliance ensures plans are administered fairly, consistently, and legally.
📘 Why Compliance Matters
Benefits compliance protects employees, reduces employer risk, and ensures plans meet federal requirements. Noncompliance can lead to penalties, lawsuits, and reputational damage.
🏛️ ERISA: The Foundation of Benefits Law
The Employee Retirement Income Security Act (ERISA) governs most employer-sponsored health and retirement plans.
- Fiduciary duties — Acting in the best interest of participants.
- Plan documents — SPD, SMM, plan amendments.
- Claims and appeals rules — Timelines and procedures.
- Reporting — Form 5500 filings for applicable plans.
🏥 ACA: Affordable Care Act Requirements
The ACA introduced major compliance obligations for employers:
- Employer mandate — Applicable large employers must offer affordable, minimum-value coverage.
- Reporting — Forms 1095-C and 1094-C.
- Essential health benefits and preventive care rules.
- Cost-sharing limits and out-of-pocket maximums.
🔐 HIPAA: Privacy and Security
HIPAA governs how protected health information (PHI) is used and disclosed.
- Privacy Rule — Limits on PHI use.
- Security Rule — Safeguards for electronic PHI.
- Breach Notification Rule — Requirements for notifying participants.
🔄 COBRA: Continuation Coverage
COBRA requires employers to offer temporary continuation of coverage after qualifying events.
- Qualifying events — Termination, reduction in hours, divorce, dependent aging out.
- Election notices — Strict timelines.
- Premium rules — Up to 102% of cost.
⚖️ Nondiscrimination Testing
Many benefits must pass nondiscrimination tests to ensure they do not favor highly compensated employees.
- Section 125 cafeteria plans
- Self-funded medical plans
- Dependent care FSA
