What hold-harmless protection on compliance services covers.
Hold-harmless protection is a written promise from a compliance service provider to cover certain losses that come from its own mistakes. What it covers depends on the wording of the service agreement, so the useful question is not whether a vendor has it, but what it says.
Three things the protection is built around.
Read each one against the actual agreement. Which services attach to it depends on the service agreement.
A Provider Error
The protection responds to a mistake the provider made in performing a covered service, such as a notice not sent on time, a filing prepared wrongly or a deadline the provider missed.
Penalties and Related Costs
Depending on the terms, it can cover penalties and assessments that result from the error, and it may name related costs such as correcting a filing. The agreement says which.
One Stated Limit
The arrangement we can offer carries one total limit of up to $1,000,000 across all covered losses, subject to the written terms.
The services it can reach.
Continuation and Leave
COBRA administration and FMLA administration, where a missed notice or deadline is the common error.
Reporting and Notices
ACA employer reporting, Medicare Part D notices and PCORI compliance, which run on fixed dates.
Plan Compliance
ERISA compliance, Form 5500 preparation, HIPAA compliance, nondiscrimination testing and dependent eligibility verification.
The questions employers ask about this.
Five questions to settle before you rely on it.
Does the protection cover every compliance mistake?
No. It responds to errors made by the provider in a covered service. A problem that starts with late or wrong information from the employer is generally outside it.
Does it cover the employer’s own penalties?
Where a penalty results from the provider’s error in a covered service, the terms can respond to it, up to the limit. Read the wording on what counts as a covered loss.
Does it apply to every service we buy?
Not automatically. It attaches to the services named in the agreement, so confirm that each service you use is listed.
Is there a single limit or one per claim?
The arrangement we can offer is one total limit of up to $1,000,000 across all covered losses, subject to the written terms.
Does it replace our own compliance work?
No. The employer remains responsible for plan compliance and for choosing and watching its service providers. The protection is a backstop behind the service.
Ready? Upload your renewal, or talk it through with someone first. No cost, no obligation.
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.
Compliance Services With Hold-Harmless Protection
What the protection is, what it covers and what to ask.
What Triggers a Hold-Harmless Claim
A claim starts with a loss that traces back to the provider’s own error.
What Hold-Harmless Protection Does Not Cover
The exclusions matter as much as the headline limit.
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.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →