A health plan is more than a product or service; it’s a relationship. All productive and healthy relationships—especially in the benefits space—rely on trust. When an employer extends trust in a broker or insurance carrier to purchase something as critical as healthcare—for people as critical as their workers and families—we’re obligated to raise all factors that affect that purchase.
Assisting employers with benefits compliance requires understanding key benefits laws to effectively engage, educate, and be a better partner to employer clients. The six compliance obligations listed below are just as important to check on when talking with clients about their organizational health.
1. Employee Retirement Income Safety Act (ERISA)
Dating back nearly a half century, ERISA is essentially the heart of benefits law—setting the standards of protection for employees and their families when they enroll in employer-sponsored benefit plans. Meeting those standards can cause a compliance migraine for employers—particularly when it comes to creating, updating, and distributing Summary Plan Descriptions (SPDs).
Compounding the pain, employers might think their SPD will be created by their insurance carrier or broker, but this isn’t typically the case. It’s important that employers understand their responsibility to know which benefits are subject to ERISA rules, to have these documents created through a reputable vendor or an attorney, and to adhere to ERISA’s distribution requirements.
2. Affordable Care Act (ACA)
Upheld after a contentious congressional approval and multiple Supreme Court challenges, this 2010 law changed the landscape of health insurance in many ways, not least of which was creating new compliance obligations for employers. ACA requires employers to distribute a Summary of Benefits and Coverage (SBC) to participants and beneficiaries—including enrolled, nonactive employees—plus additional requirements for ALEs (applicable large employers), those with 50 or more full-time and full-time equivalent employees.
ACA’s hidden health hazard for employers is that the law requires commonly or jointly owned businesses to count all employees together. An HR professional for one business may not know that their employer owns multiple businesses (since commonly owned businesses may not share resources like HR and benefits departments). So, asking about ALE status is an important question brokers and carriers can ask clients as a way to open the conversation about overall ACA compliance obligations.
3. Transparency in Coverage
Signed into law in 2021, the No Surprises Act builds on ACA transparency rules by requiring group health plans to:
- Post in-network negotiated rates, and out-of-network allowed amounts on a public-facing website.
- Provide a web-based price comparison tool that allows individuals to estimate their cost-sharing responsibility for a specific item/service from a particular provider.
- Annually report detailed information related to prescription drug costs, including most frequently dispersed brand-name drugs and most costly drugs.
Although fully insured plans will rely heavily on insurance carriers to make the information available, self-funded groups will bear the compliance obligations. It is critical for plan sponsors to work with carriers and third-party administrators to outline and clearly document who is responsible for each requirement.
4. Family and Medical Leave Act (FMLA)
FMLA, specifically designed to protect employees and their jobs when taking leave to care for themselves or a family member, exposes employers to compliance risk—especially as it pertains to maintaining employee health benefits.
The law requires employers to maintain an employee’s coverage, including employee contributions, as if they had not taken leave, and prohibits benefits termination while on leave except in limited circumstances.
To keep a compliance cold from turning into a full FMLA flu, broker partners must help employer clients understand their FMLA obligations, including: which benefits fall under the group health category, how to collect employee premiums while on FMLA leave, and how to provide mandatory information and notices while an employee is on FMLA leave.
5. COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA), passed in 1985, applies to most employers with 20 or more employees that sponsor group health plans. The law is relatively straightforward, a rarity in benefits regulations.
Still, it is imperative to know help clients understand COBRA’s key provisions to effectively support them in meeting compliance obligations, including the rules for removing an ineligible dependent if an employee neglects to notify their employer for six months after a divorce is final.
6. Medicare
As employees stay in the workforce longer, employers must understand Medicare rules related to:
- Prescriptions—in particular, calculating whether their plan offers creditable coverage (compared to the standard Part D plan) and notifying Medicare-eligible employees about the creditable/non-creditable coverage calculation.
- Disclosures—specifically, preparing and submitting to CMS (Centers for Medicare and Medicaid Services) disclosure about whether the plan provides creditable coverage.
- Plan limits for cost-shifting when Medicare-eligible employees have dual coverage. The rules differ for employers with fewer than 20 employees, 20 to 99 employees, and 100 or more employees. For employers with 20 or more employees, Medicare rules limit employer plans as the primary payer from shifting an individual’s healthcare costs onto Medicare. Employers need to understand the interaction between their plan and Medicare to meet their compliance obligations.
It’s important for all parties involved to have a baseline understanding of benefits compliance obligations so they can effectively support employer clients in finding a benefits administration platform, a broker to assist with enrollment meetings, a carrier to find an in-network provider for a specialty service, and other scenarios. Compliance rules and regulations are complex. Partnering with other industry professionals, such as Mineral, is an excellent way to ensure that employer groups are educated, supported, and compliant.
