The cost of noncompliance is huge.
If an employer goes through an audit and doesn’t have the correct benefits documents in place, they may be subject to significant fines and penalties.
- In 2014, 65% of the cases audited for compliance resulted in fines or other corrective action.
- If employers don’t meet ERISA’s requirements, fines like these may result:
- Up to $110 per day, per plan.
- Failure-to-file penalties of up to $1,000 per day, per plan.
- IRS penalties of $25 per day up to $15,000 per year.
- Individual punishments for other breaches of fiduciary responsibilities.
- Over the past 12 years, 32% of employers audited are fined over $10,000.
We know most employers can’t easily create these documents and employers are held legally responsible, so they often look to their brokers to help solve this problem. Left on their own, we see employers usually relying on a carrier certificate, which is not ERISA compliant, or pay high attorney fees.
Since employers rarely have the knowledge, or time, to manage their own benefits compliance needs, help from their insurance broker is critical. If your broker is not providing this service consider the Chamber’s recommended employee benefits firm USI Affinity. Their “My Benefits Advisor” program provides these compliance services at NO cost when you engage their brokerage. Contact the chamber or our liaison person Jim Pitts directly at USI. phone: 610-537-1377 or email: email@example.com