Navigating Federal Regulations for Employer-Sponsored Health Plans

Employer-sponsored group health plans must navigate an array of federal regulations including ERISA, the ACA, COBRA, HIPAA, and the Mental Health Parity and Addiction Equity Act. Each law enforces specific documentation requirements, deadlines, and operational rules. While many employers strive for regulatory compliance, the complex and evolving nature of these regulations often presents significant challenges.

Conducting a proactive compliance review with legal assistance is essential for employers aiming to reduce legal risks, enhance governance, and prepare for potential regulatory scrutiny. This review should focus on several critical compliance areas.

Under ERISA, welfare benefit plans are required to have a written document that meets specific requirements. Compliance reviews frequently uncover documentation gaps, posing potential liabilities. Ensuring adherence to ERISA's disclosure obligations is vital, as non-compliance can lead to participant lawsuits and penalties from the Department of Labor (DOL).

Many employers may not fully recognize their obligations regarding Form 5500. Key considerations during reviews include whether the plan's size necessitates annual filing, inclusion of all required schedules, and verification of the accuracy of recent filings. Examining filings from the past three years can identify errors needing correction before regulatory inquiries.

Fiduciary liability is another critical component. Plan fiduciaries are personally liable for duty breaches. Reviews should evaluate whether a benefits committee exists with a documented structure, an appropriately sized ERISA fidelity bond is in place, and service provider agreements clearly outline fiduciary responsibilities.

COBRA compliance lapses frequently lead to participant claims and DOL actions. Reviews should ensure systematic tracking of qualifying events, timely dispatch of election notices, and accurate calculation of COBRA premiums, including permissible administrative charges. Checking recent qualifying event notices provides valuable insights.

For applicable large employers, the ACA’s enforcement priorities include meeting mandates and reporting requirements. Reviews should confirm compliance with these obligations. Additionally, self-funded health plans, under HIPAA, need to maintain written privacy and security policies, designate a privacy officer, and establish Business Associate Agreements with vendors handling protected health information.

The No Surprises Act and ACA Transparency in Coverage Rule impose requirements related to balance billing protections and the publication of pricing data in machine-readable files, drawing significant compliance focus. A comprehensive health plan compliance audit should assess documents, notices, filings, and practices, aiming not only to identify deficiencies but also to prioritize corrective actions and ensure preparedness for regulatory inquiries. Employers who have not reviewed their plans in the last two to three years should consider doing so, especially in light of recent enforcement activities focused on employer-sponsored plans.