OK who volunteered to do 10 years in prison?

Those who know me, or work with Focus Benefits Group, are used to me going on and on about ACA compliance. Recently  another insurance broker commented that I had gotten up to speed on this subject pretty fast.

“That’s true, it has only been 42 years!” I commented.

ERISA has been a factor in benefits since 1974 and Summary Plan Documents (SPD) have been required for just about as long. The problem has been a lack of knowledge and professionalism on the part of Insurance brokers who were supposed to tell clients. For those who remember, many years ago insurance companies did include the ERISA language in their benefits booklets. They generally don’t do it now and you need to know that.

Business owners will face audits for many aspects of their business in the coming year. Legislators, and more onerously regulatory staff, are constantly increasing the reporting load. As a business owner you may not be able to comply with every rule but you do need to make sure you comply with at least the really important ones and the SPD is one of those.

I recently consulted for a large employer and found they had no ACA documentation, NONE! When I asked why they continue to use the advisor who left them in that position I was told “Because he gives us tickets to major sports events every year!” I am always surprised when successful business people tell me they trust their advisor on that basis. Here is the real problem.

Criminal penalties may be assessed individually or by company, for willfully violating any ERISA disclosure requirement (e.g., plan document, SPD, SMM or SAR), the penalty can be per conviction (as in per employee affected) and could be $100,000 and/or imprisonment for up to 10 years ($500,000 if assessed against a company). A plan administrator may be liable for $110 per day penalties for failure to provide a response to a request for a copy of a required document. If you don’t have the documents, how expensive might that become while you get them completed and then distributed.

When that employer is responding to the ACA audit, and looking at $500,000 in fines, I hope the sports tickets were worth it.

An SPD can be done for $200. What are you waiting for.

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