Compliance services that come with hold-harmless protection.
COBRA and ERISA mistakes carry real penalties, and most vendors will tell you the plan is yours to answer for. Through our service partners, CFH can arrange COBRA and ERISA compliance services that carry written hold-harmless protection of up to $1,000,000, subject to the written terms. Here is what that means and what to ask before you rely on it.
What the protection is, and what it is not.
A hold-harmless provision is a written promise from the service provider to cover certain losses that result from its own error. It sits behind the service. It does not replace the employer’s duty to run the plan.
What It Covers
Penalties and related costs that result from a mistake in the service itself, such as a COBRA notice that was not sent on time or a filing prepared incorrectly, up to the limit in the written terms. Depending on the service agreement, the services it can reach include COBRA, FMLA, ACA reporting, Medicare Part D notices, PCORI, Form 5500 preparation, HIPAA, nondiscrimination testing and dependent eligibility checks.
What Triggers It
A penalty or assessment that traces back to an error made by the provider in performing the covered service. The terms spell out how a claim is made and what the provider will review.
What It Does Not Cover
Problems that start with the employer, such as late or wrong data, a missed hire or termination report, or a service the employer never asked for. The exclusions are in the written terms.
Three questions to put to any compliance vendor.
Is It in Writing?
Ask for the actual language, not a sales line. The promise is only as good as the document it appears in.
What Is the Limit?
Ask for the dollar amount, and whether it is one total limit across all covered losses or a separate amount per claim or per year. The arrangement we can offer is one total limit, so confirm which services it attaches to.
What Is Excluded?
Ask what the employer has to do to stay protected, including how fast data must arrive. Most denied claims trace back to late or incomplete data.
Services the protection can reach.
Which of these attach to it depends on the service agreement. Each guide explains the rules behind the service.
COBRA Administration
Notices, deadlines and continuation coverage.
FMLA Administration
Leave rules and how they connect to group health coverage.
ACA Employer Reporting
Forms 1094-C and 1095-C, due dates and penalties.
Medicare Part D Notices
Creditable coverage notices for people eligible for Medicare.
PCORI Fee Reporting
The annual fee on self-funded plans and HRAs.
Form 5500 and Plan Documents
When a plan has to file and what it has to show.
HIPAA Privacy Rule
What a plan owes participants about their health information.
Nondiscrimination Testing
Rules for self-insured plans and highly paid employees.
Dependent Eligibility Verification
Checking who is actually eligible for the plan.
The questions employers ask about hold-harmless protection.
Seven questions to settle before you rely on it.
What does hold-harmless protection mean here?
The service provider agrees in writing to cover certain penalties that result from its own error in a covered COBRA or ERISA compliance service, up to a stated limit. The written terms control.
How much does the protection cover?
The arrangement we can offer carries one total limit of up to $1,000,000 across all covered losses, not a separate amount per claim, subject to the written terms. Ask to see the terms and how the limit applies.
Which penalties are we talking about?
COBRA notice failures can bring an excise tax that can reach $100 a day for each affected person under the Internal Revenue Code, and ERISA allows a court to assess up to $110 a day for failing to provide required notices. Amounts can be adjusted, so check the current figures.
Does it cover mistakes that start on our side?
Generally no. If the employer reports a termination late or supplies wrong information, the error did not start with the provider. The terms spell out what the employer must do.
Does it replace our own responsibility for the plan?
No. The employer remains the plan administrator under the law unless it delegates certain duties, and a provider can take on tasks but not the employer’s ultimate responsibility. The protection is a backstop.
How do we find out whether a service qualifies?
Send us the plan details and tell us which services you use today. We will tell you which ones can carry the protection and what the terms say.
Which services can the protection cover?
Depending on the service agreement, it can reach COBRA administration, FMLA administration, ACA employer reporting, ERISA compliance, Medicare Part D notices, PCORI compliance, HIPAA compliance, Form 5500 preparation, nondiscrimination testing and dependent eligibility verification. Ask which of these your agreement includes.
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General information about compliance service protections, not legal or tax advice. Plan-specific questions belong with your counsel, and we will bring them in.
Related guides.
COBRA Administration
Notices, deadlines and continuation coverage.
Form 5500 and Plan Documents
When a plan has to file and what it has to show.
Compliance Calendar
The dated filings and notices employers owe each year.
Compliance Service Bundles for Employers
Related compliance services arranged together.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
COBRA Excise Tax (26 U.S.C. 4980B)
The tax on failures to meet COBRA continuation coverage requirements.
ERISA Civil Enforcement (29 U.S.C. 1132)
Includes the daily amounts a court may assess for failing to provide required notices.
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.
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