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{ business solutions } by Greg Russell • MDIS Executive Vice President


Get a Wrap or Take the Rap T


he Employee Retirement In- come Security Act (ERISA) is a federal


law regulated by the Depart- ment of Labor (DOL) that, as its name implies, mandates certain requirements for retirement plans offered by employers to their employees (under Title 2 of ERISA). Under Title 1, Health and Welfare, ERISA law also regulates and mandates that employers provide to employees certain information and documents if a plan is established or maintained for the health and welfare of the employees for any of the following: • Medical, surgical or hospital care benefits


• Benefits for sickness, accident, disability, death or unemployment


• Vision, dental, child care, scholarship funds, prepaid legal services, etc.


• Any benefits described in Section 302(c) of the Labor Management Relations Act


According to DOL, a voluntary benefit program where the employee pays the entire premium or cost would not be an ERISA- covered plan if the employer does not urge or encourage employee participation and does not “endorse” the Plan.


The best example of where employers may not be in compliance with ERISA is with Health Insurance. Just like a Retirement Plan which requires a Plan Document and an Summary Plan Description (SPD), health in- surance or any other ERISA-covered Health and Welfare benefit must also have on file and distribute the SPD to employees. Plan booklets and insurance certificates are not enough, because there is other legal language that must be included. You could hire a labor law attorney, which could be expensive. Or there are vendors who can provide the work


24 focus | NOV/DEC 2016 | ISSUE 6


and documents that you need for a reason- able cost.


However, compliance is achieved most easily by using a Wrap Document which consists of a Plan Document, a Summary Plan Descrip- tion and any other required documents, such as the ACA (Affordable Care Act) provisions. The Wrap document “wraps” around the other existing documents and paperwork that may have been provided from an insur- ance carrier. While a Wrap document is not specifically required, it is the easiest way to provide the requirements for all of your employee benefits that come under Title 1 of ERISA law. Otherwise, you would need a separate Plan Document and SPD for each benefit.


Now why be concerned with all of this? It has nothing to do with how you practice dentistry, but as stated earlier, it is part of the ERISA law that impacts employers of all sizes, including you. It does not matter if the benefit is written or informal, funded or unfunded, the DOL has generally held that there is a “plan” if an employer is providing one or more of the benefits discussed earlier.


Failure to comply with ERISA can lead to a penalty of up to $110/day per participant for each violation. Lack of having an SPD could trigger an audit by DOL, which could


lead to their snooping around in all of your business. Having documentation in order helps protect against having disgrun- tled employees file complaints or take issue with you, the employer.


The compliance industry has seen an increase lately in “desk audits” where the DOL simply contacts you to provide them with the documents to review for compliance. Then if you delay or give them an excuse,


it could lead to a full blown “on-site audit” which may lead to more serious violations. Will this increased interest in compliance change now that we have a new president? There is no assurance of this because ERISA law is already on the books and government agencies are just “doing their jobs” making sure employees are not taken advantage of (slight sarcasm intended).


There are additional requirements regarding the method and when the documents must be distributed and other things, like foreign language requirements, that we will save for another day. We created an analogy in the last issue of the Focus where we compared being in business today as a game with your opponent teams being health benefit deci- sions, government compliance, and all of the assorted challenges you are faced with in business. ERISA compliance is just another one of those “players”. Remember, we’re only the messenger and along with MDA are a part of your team. Put us in the game! Together we can win! f


CONTACT MDIS AT 800-944- 7550 or greg@mdis4dds.com with questions and concerns, and to learn how we can help you create a Wrap document. We’ll always provide you honest answers, practical solutions and personal service.


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