Welfare Benefit Plan ERISA News & Views
April 2012

 
Good Faith & Reasonable Efforts Help
Mitigate Penalties
An employee sued her former employer for COBRA notice violations. However, the court held that the employer operated in good faith and the participant was not harmed, so it only assessed a $500 notice penalty for ERISA noncompliance. Middlebrooks v. Godwin Corp. Although this case is about COBRA notice violations in particular, courts and regulators may look favorably upon an employer that makes reasonble efforts to comply in good faith.
Employers May Need to Provide SBCs in a
Foreign Language
The new Summary of Benefits and Coverage (SBC) must be provided beginning on the first day of the first open enrollment period beginning on or after September 23, 2012 and upon the request of any eligible individual, on and after the first day of the first plan year beginning after September 23, 2012.
The SBC must be written in a "culturally and linguistically appropriate manner," meaning it may need to contain a notice, or be provided, in a foreign language if 10% or more of a county's population is literate only in the same non-English language. So far, 255 U.S. counties in California, Texas, Georgia, Illinois, and Kansas have been identified as meeting that threshold in Spanish, Chinese, Tagalog (Filipino), and Navajo.
It is important to note that "grandfathered" health plans are not exempt from these requirements, and these foreign language requirements are separate and distinct from those imposed by ERISA on Summary Plan Descriptions (SPDs). (More details)
Avoiding Costly Compliance Errors
CFO magazine discusses potentially expensive compliance errors and how to avoid them. This article focuses on 1) maintaining required plan documents, 2) supplying these documents within 30 days of a written request, 3) maintaining them for at least 6 years (or longer, depending on the state), 4) filing Form 5500 each year, 5) complying with HIPAA privacy standards, 6) reporting health insurance costs on W-2s, and 7) providing a Summary of Benefits and Coverage (SBC).
ERISA Trivia
Which Section of the Internal Revenue Code was enacted to provide for more expansive nondiscrimination rules for health care and other employer-provided fringe benefits, but was soon repealed because it was excessively complex and generally unworkable. Send your answer to info@erisapros.com. The name of the first correct respondant will be announced next month.
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.

 

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