How employers can prevent ERISA penalties…
…and how our TASC ERISA service helps employers stay compliant.
For applicable employers, ensuring that your employee benefits plans comply with the Employee Retirement Income Security Act of 1974 (ERISA) can be difficult. ERISA governs a wide range of employee benefit plans, and failing to comply with its complex rules and regulations can result in costly penalties, legal disputes, and a damaged reputation. However, with the right strategy and resources, you can avoid these penalties and stay on the right side of the law. That’s where a third-party administrator (TPA) with a robust ERISA service like TASC can make all the difference.
Let’s walk through some of the most common ERISA penalties and how employers can proactively prevent them, as well as how TASC ERISA can help employers stay compliant and mitigate penalties associated with ERISA Health & Welfare Plan violations.
Common ERISA Penalties and How to Prevent Them
- Failure to File Form 5500
- Form 5500 is an annual report that provides the government with important information about the operation and financial condition of your employee benefit plans. This form is required for most ERISA-covered plans, and noncompliance comes with penalties.
- Penalty amount: $2,739
- How to Prevent It: Be sure to file your Forms 5500 by the deadline. TASC ERISA ensures expertise for timely and accurate filing, as well as continuous regulation monitoring to stay on top of any changes to filing requirements so that critical changes are always satisfied.
- Failure to Distribute Required Plan Documents to Participants
- ERISA mandates that employers provide certain documents to plan participants, including the Summary Plan Description (SPD), Summary of Material Modifications (SMM), and other disclosures. These documents must be provided on time, in the right format, and to the correct recipients.
- Penalty: $110 per day after 30 days of plan beneficiary requesting (in writing) a copy.
- How to Prevent It: Know which documents must be distributed, when, and the correct format (e.g., physical vs. digital). TASC ERISA helps ensure all required plan documents are distributed to participants within the required timeframes and in the right format.
- Failure to Provide the Summary of Benefits and Coverage
- ERISA mandates that every Group health plan must provide an SBC (Summary of Benefits and Coverage) to plan participants.
- Penalty: $1,143 per failure
- How to Prevent: Know that the SBC is required of all ERISA group health plans and that these are required of all traditional HRAs and ICHRAs also. TASC helps employers navigate their responsibilities with expertise.
TASC ERISA Provides Compliance Expertise and Reduces Risk
ERISA violations and penalties are no joke. That’s why employers who want peace of mind and to prevent ERISA penalties choose TASC. Our team of ERISA experts ensures timely and accurate filing, plan documentation and distribution instructions, ongoing regulation monitoring to stay on top of changing requirements, and so much more. Employers can stop worrying about ERISA compliance related to their Health & Welfare plans when it comes to plan documents, notices, 5500 filings, etc. and get back to doing what they do best.
If your organization or client(s) wants more information about TASC ERISA, request a proposal today!
