An ERISA-covered group health plan is an employment-based plan that provides coverage for medical care, including hospitalization, sickness, prescription drugs, vision, or dental.
New healthcare regulations have created an aggressive audit environment.
- Approximately 16,500 auditors have been hired by the IRS to conduct ERISA audits.
- Of audited plans,75% violate ERISA, and 70% of plans end up with fines up to $100 per day per affected employee. For a 55 person health group, the fines could total $110,000 in one month after being audited.
- Determines the number of employees affected by your health plan,
- Creates all the required documents, and
- Provides regular updates about new compliance issues and reviews documents accordingly.
Clear employer-employee communication is the most important factor in smooth business operations. A comprehensive employee handbook is vital. Strategic Administrative Services will draft an effective orientation tool that answers questions for all new employees. Employers are able to clearly address expectations in an employee handbook.
When it comes to new hires, what you don’t know can hurt you. The safest way to avoid long term issues or lawsuits is to do thorough background screening of all new hires. Strategic Administrative Services will make sure your new employees meet your company’s standards.
Flexible Spending Arrangement (FSA)
If your company offers a health plan, employees may opt to have a Flexible Spending Account. An FSA allows a fixed amount of pre-tax wages to be set aside for qualified expenses. Qualified expenses may include child care or uncovered medical expenses. The amount set aside must be determined in advance and employees lose any unused dollars in the account at year-end.
COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. Health coverage for COBRA participants is usually more expensive than health coverage for active employees. This is because employers usually pay a part of the premium for active employees, while COBRA participants generally pay the entire premium themselves. We can help you set up your COBRA coverage, or help you find a better health coverage alternative.
Health Reimbursement Arrangement (HRA)
If your company offers a health plan, you may establish a health reimbursement arrangement. An HRA is an IRS-approved, employer-funded, tax advantaged employer health benefit plan that reimburses employees for out of pocket medical expenses and individual health insurance premiums. The employer makes contributions to an employee’s account and provides reimbursement for eligible expenses. A health reimbursement arrangement is an excellent way to supplement health insurance benefits and allow employees to pay for a wide range of medical expenses not covered by insurance.
The Premium Only Plan is the building block of the Section 125 Plan. It allows for certain employee paid group insurance premiums to be paid with pre-tax dollars. Employees can reduce their taxable income by 20 – 40%. The savings are on city, state, and federal income taxes, including Social Security and Medicare. Employers save the matching Social Security (6.20%) and Medicare (1.45%) taxes, which equates to 7.65% (1.45% for municipalities) of all the dollars put through the plan, a substantial savings.