Add Row 
Add 
Audit Preparedness: Why It Matters More Than Ever
As we usher in a new era of regulatory oversight, ensuring that your benefit plans are compliant has never been more essential. Regulatory bodies are paying heightened attention to organizations, prompting a need for vigilance in maintaining audit readiness. Organizations can escape a host of pitfalls—including hefty fines, damaged reputations, and disgruntled employees—by taking proactive measures in compliance.
In a recent informative webinar led by esteemed attorney John Barlament from Reinhart Boerner Van Deuren, employers learned valuable strategies for navigating this challenging landscape. It’s crucial to understand audit requirements and take steps to maintain compliance to avert costly compliance mistakes.
Understanding the Audit Landscape
It's crucial for employers and plan sponsors to understand that the threat of audits can arise from agencies like the Department of Labor (DOL), the Internal Revenue Service (IRS), or the Department of Health and Human Services (HHS). Typically, the focus of these audits includes regulations and benefit payments—a pressing reminder for organizations to prepare adequately.
Key Players in Compliance
Compliance originates at the top. It’s essential for board members, plan administrators, and fiduciaries to take an active role in ensuring that regulations are adhered to. Establishing a benefits committee comprised of knowledgeable individuals can streamline compliance processes and improve risk oversight, fostering a culture of responsibility.
Risks of Non-Compliance
Being unaware of compliance regulations is a gamble businesses can’t afford to take. The DOL often uncovers fiduciary breaches during their audits, which can lead to significant fines—up to $100 per individual affected, per day. Engaging in non-compliance not only has financial ramifications but can also tarnish the organization’s reputation and incite legal consequences.
Navigating Key Benefit Laws
When preparing for audits, organizations need to be well-versed in key benefit laws that govern employer-sponsored health plans:
- Employee Retirement Income Security Act (ERISA): A fundamental federal law dictating the standards for employee benefit plans. Non-compliance can lead to severe penalties.
- Mental Health Parity and Addiction Equity Act (MHPAEA): Ensures mental health services are covered equally to physical health services within employer plans.
- Consolidated Appropriations Act (CAA): Introduces transparency provisions to protect participants and prohibits certain gag clauses.
- Affordable Care Act (ACA): Mandates essential coverage services and requires large employers to offer minimum-value insurance.
- Consolidated Omnibus Budget Reconciliation Act (COBRA): Grants employees the right to continue health coverage after certain qualifying events.
Preparing for Potential Audits
Employers should take a systematic approach to compliance: utilize existing resources to understand the laws applicable to their plans and update policies accordingly. Regularly revisiting plan documents and ensuring vendor contracts indicate compliance procedures are essential steps for avoiding pitfalls.
A Proactive Stance is Key
Knowledge is power when it comes to compliance. By standing firm in understanding their responsibilities, organizations empower themselves to navigate complex regulations without becoming overwhelmed. The more proactive businesses are in preparing for audits, the better equipped they will be to defend against scrutiny while providing sound benefits to their employees.
Write A Comment