The compliance work nobody sees until an auditor asks for it.
Testing, dependent audits, privacy documents, leave requests and the fees and notices that come due once a year. Each is small on its own, and each is the kind of thing that goes missing when it has no owner.
A plan that favors the highest paid loses its tax advantage for them.
Pre-tax plans have to pass annual tests showing they do not favor highly compensated or key employees. A failed test is fixable, and there are more ways to fix it when it is found before the plan year ends. Tests are run on your census, packaged into one annual cycle, with guidance on correcting any that fail.
Cafeteria Plans and FSAs
Eligibility, contributions and benefits tests, plus the key employee concentration test, run for the plan that lets employees pay premiums and fund accounts pre-tax.
Dependent Care and HRAs
The dependent care account has its own tests, including the 55% average benefits test, and reimbursement arrangements are tested on their own.
Self-Funded Medical and Group Life
Self-funded and level-funded medical plans are tested under Section 105(h), and group term life above $50,000 has its own rules for key employees.
An ineligible dependent is a claim you pay for someone who is not on the plan.
An audit asks every employee to document the dependents they cover, then reports who is verified, who is not and who never answered.
How It Runs
An announcement from the employer, a letter to each employee with a dedicated help line, up to three reminders and an appeals process, followed by a final report sorting every dependent into verified, ineligible or no response. Spouses can be included or left out.
Timing and Amnesty
Most audits run ahead of open enrollment, often with an amnesty window so employees can remove ineligible dependents before verification starts.
Communications Handled
Employees hear from the audit team directly, so HR is not the one chasing birth certificates and marriage records.
A Report You Can Act On
Results go straight into enrollment, so removals take effect cleanly instead of lingering on the carrier bill.
A group health plan has privacy duties of its own.
The plan is a covered entity, and an employer that sees plan information needs the documents that say how that information is protected.
Policies and Procedures
A HIPAA privacy policy, the plan amendment and plan sponsor certification that let the employer see plan information, and the safeguards that go with them.
Notices and Agreements
The privacy notice employees are owed, and business associate agreements with the vendors who handle plan information.
Training and Updates
Training for the people who touch plan data, and updates to the documents as the rules change.
The fees, notices and leave requests with a clock attached.
PCORI Fee
Self-funded plans, including level-funded plans and most HRAs, pay a small per-covered-life fee with Form 720, due 31 July of the year after the plan year ends. We can help you calculate it and file.
Medicare Part D Notices
Every Medicare-eligible person on the plan gets a creditable coverage notice before 15 October, whatever the employer’s size, and the plan reports its status to CMS within 60 days of the plan year starting.
Family and Medical Leave
Leave requests taken by phone or online, eligibility checked against the service and hours rules, intermittent leave tracked, and every communication recorded, with reports HR can see at any time.
What employers ask about compliance administration.
We are fully insured. Do we still need testing?
If employees pay premiums pre-tax through a cafeteria plan, yes. The tests apply to the cafeteria plan whether the medical plan is insured or self-funded.
How often should we audit dependents?
Many employers run a full audit once, then verify new dependents as they are added.
Does HIPAA apply if we never see claims?
The plan still has duties, but a fully insured plan whose sponsor receives no protected health information has far fewer of them.
Who pays the PCORI fee on a fully insured plan?
The carrier. The employer pays it for self-funded plans, and for most HRAs even when the medical plan is insured.
Does a small employer owe the Part D notice?
Yes. There is no size exemption.
What happens if a test fails?
Usually the highly compensated employees’ pre-tax contributions are reduced or become taxable for the year. Finding it before the year ends leaves more ways to fix it.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Bloomfield Hills, MI 48304
248.370.8853
Colorado Springs, CO 80921
719.425.2649
Houston, TX 77084
281.404.5670