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Group Health Plans: 3 Ways to Lower the Risk of a DOL Audit


Don't think it can't happen to you: Statistics compiled by the U.S. Department of Labor's Employee Benefits Security Administration reveal the following:

  • From fiscal year 2016 to 2017, the agency nearly doubled its enforcement action recoveries — increasing from $352.0 million to $682.3 million, respectively.
  • From fiscal year 2017 to 2018, the EBSA's enforcement action recoveries rose again, this time by 61% — jumping from $682.3 million to $1.1 billion, respectively.

These enforcement actions relate to welfare benefit plans that the agency oversees, such as retirement plans and group health plans covered by the Employee Retirement Income Security Act of 1974.

Enforcement action usually begins with an investigation or an audit. So, as a group health plan sponsor, your goal is to minimize the risk of being audited. Here are three ways to do this:

1. Keep your guard up.

One of the biggest slipups you can make is assuming that the DOL has no reason to audit your group health plan and therefore will not. Although most DOL audits are prompted by a specific reason, the agency can also audit based on random selection.

Besides random selection, group health plans may be audited because of:

  • Complaints by participants of the group health plan.
  • Improper Form 5500, Annual Return/Report of Employee Benefit Plan, filings.
  • Referrals from government agencies, advocacy groups or the state insurance department.
  • Information received from the media.

2. Review all laws impacting your group health plan.

A DOL audit of your group health plan may involve a compliance review of ERISA and all applicable laws, including:

  • The Affordable Care Act.
  • The Health Insurance Portability and Accountability Act.
  • The Genetic Information Nondiscrimination Act.
  • The Mental Health Parity Act.
  • The Mental Health Parity and Addiction Equity Act.
  • The Newborns' and Mothers' Health Protection Act.
  • Michelle's Law.
  • The Women's Health and Cancer Rights Act.
  • The Children's Health Insurance Program Reauthorization Act.

Additional areas of review may pertain to the Consolidated Omnibus Budget Reconciliation Act as well as group health plan notice requirements.

To reduce the odds of a DOL audit, conduct compliance reviews internally on a quarterly basis or at least twice per year.

3. Verify that your Form 5500 filings are in good standing.

As stated earlier, improper Form 5500 filings can trigger a DOL audit. So if you're required to file Form 5500, be sure to do so correctly and on time.

Also, don't wait for an audit to occur to fix Form 5500 mistakes; you'll likely pay a high price for the delay. Instead, be proactive and take corrective measures as soon as possible. For instance, if you missed a filing deadline, you might be able to file the overdue report and reduce potential penalties by utilizing the EBSA's Delinquent Filer Voluntary Compliance Program. Details of the program are available on the DOL's website.



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