Is Your Employee Benefit Package Compliant?

An employee benefit package is a perk that your staff members receive on top of their salaries. These often include medical and life insurance policies.

Offering an MD employee benefits package is a great way to keep employees in your company. Giving your staff perks that are useful to them will make them feel valued and increase job satisfaction. Receiving extra benefits will also encourage employees to go to work and miss fewer workdays. They will be less likely to quit and be more committed to helping you meet your business objectives.

Who manages employee benefit packages?

As an employer, you need to make sure that your company’s health and welfare benefit plans are fully compliant. The responsibility of monitoring these benefits and ensuring their conformance to legal requirements rests on plan administrators.

What do plan administrators do?

Plan administrators are responsible for ensuring compliance with all judiciary requirements. They follow fiduciary requirements, such as:

  • Establish and maintain procedures in a fair and financially sound manner
  • Fund benefits according to the law and plan rules
  • Report and disclose information on the operations and financial condition of plans to the government and participants
  • Provide necessary documents during a compliance investigation

Disclosure and notification requirements

Businesses are legally required to send notifications based on the benefits they offer and the number of their employees. Here are some essential requirements for ensuring benefits compliance:

Summary of benefits and coverage

The insurance provider or third-party administrator usually creates a summary of benefits and coverage. Plan administrators provide the overview to participants and beneficiaries when they apply for coverage and when they renew their plans.

Plan administrators should give participants and beneficiaries 60-day advance notice of any changes that may occur within the year covered by the plan. They should also provide a plan review to participants and beneficiaries that enroll or re-enroll in benefits programs.

Notice of patient protections and selection of providers

Plan administrators should provide all participants with advice on patient protection and provider selection. They should also provide information on available health care specialists and emergency care benefits.

This requirement applies to companies that offer medical insurance to their employees. Plan administrators should provide this notice to staff members when they receive the summary description of plan benefits.

COBRA notice

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires companies to provide covered employees–as well as their spouses and dependents–with written notices of their COBRA coverage rights. This applies to companies that offer group health plans and have more than 20 employees.

The notices should be written in easily understandable language. They should be given to the concerned parties within 90 days of the beginning of the plan’s coverage.

Depending on your company’s benefits, you may be required to send out other notices to employees and their dependents. It would be best to look up the requirements for the specific benefits package you offer.

Ensuring employee benefits package compliance

There are certain benefit administration practices you can adopt to ensure the compliance of your employee benefits package. Some of the most essential are:

Plan year and open enrollment

After defining a plan year, consider holding an open enrollment to provide your employees with the opportunity to review their coverage and change providers.

Eligibility and waiting periods

Under the Affordable Care Act (ACA) guidelines, employees are entitled to a waiting period that allows them to join a medical plan within 90 days of being hired. Waiting periods are commonly set on the first of the month following 30 or 60 days of employment.

Measurement periods

A set measurement period lets you monitor the work hours of new variable-hour employees. This applies to individuals who work on a part-time, temporary, or seasonal basis. Employees that average 30 hours or more per week during the measurement period are eligible to participate in the medical plan.

Administrative periods

A defined regulatory time of 30 to 90 days between the measurement period and insurance effective date gives you time to calculate employee eligibility. It also gives you enough time to provide enrollment materials and conduct other administrative functions. Keep in mind that the combined measurement and regulatory periods should not exceed 13 months.

Stability periods

After the measurement period, employees deemed eligible for medical insurance coverage should remain qualified for this benefit even if their average weekly working hours change. This applies to time equal to the defined measurement period or six months, whichever is greater.

Acquire a tailored employee benefits package

Apart from complying with laws on employee benefits, you should also ensure that your plan meets your company’s financial and benefit requirements and goals. It might be a good idea to consult with a specialist who will help you tailor your benefits package based on your employees, resources, and priorities. This could help you save money while ensuring that your workers’ needs are met.

About Moody Insurance Worldwide

Moody Insurance Worldwide, a division of Moody & Associates that was founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all sizes of businesses, with technical expertise in many key industry areas, and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.