Health and welfare plans cover a broad spectrum of benefits that deal with employees’ well being. These benefits include healthcare, dental (which is usually separated from healthcare for specific planning purposes), vision (again separated for planning purposes), short and long-term disability, vacation and sick leave, and flexible spending accounts.
While health and welfare benefits are becoming increasingly important for employers to ARM (attract, retain, and motivate) their employees, these plans can present economic and legal challenges. Especially in light of the recent health care reform, now it is more important than ever that employers carefully consider the potential costs and legal requirements of creating and maintaining health and welfare plans.
Some health and welfare plans are casual to the point of not quite being a plan at all. Those plans are not subject to ERISA regulations. Most plans, however, are subject to ERISA and a litany of other pertinent statutes known in the industry as the “alphabet soup.” Some of these statutes may be familiar to you, such as COBRA and HIPAA, while others like GINA may not. Each statute covers a different subject, sometimes in many different ways.
Did you know? Employers often run into difficulties in plan design and administration by either taking an inordinate amount of time to learn each applicable statute or risking noncompliance by not looking into these laws.
Solution: Employers turn to outside service providers such as employee benefits attorneys to solve this problem, as benefits attorneys can guide plan design and
administration to comply with the alphabet soup as well as counsel clients on any issues with the plan or goals they might have for the plan or their business. While non-
attorney service providers often provide some of these services, only employee benefits attorneys can offer employers the most comprehensive and flexible service
reinforced by a legal opinion. No other provider, no matter how competent or capable, can practice law and, thus, guarantee results with a legal opinion as can an attorney.
One of the newest additions to the alphabet soup is healthcare reform, or the Patient Protection and Affordable Care Act (PPACA). Depending on your politics, some, including the popular media, refer to this as “Obamacare.” While most of the media focus on this statute revolves around the mandate provisions, PPACA contains a large number of other changes which affect healthcare plans as well. Did you know? The Ratliff Law Firm can counsel your business on full PPACA compliance, as well as exemption options such as grandfathering and waivers which you may not be aware exist.
Similar to retirement plans, many service providers often approach employers with a “set it and forget it” marketing scheme, meant to both alleviate employer concerns over liability and portray the administration of a healthcare plan as a simple operation which will rarely require the employer’s attention. This simply promotes a false sense of security, encouraging a “head in the sand” mentality. While these claims are often somewhat true, they do not offer a complete or accurate picture of how plan administration can or should proceed for your business. With only a small additional amount of effort by your benefits attorney, you can substantially improve your position over these “cookie cutter” plans.
Did you know? While you can be shielded from some liability as a plan sponsor, you can never be fully protected nor contract that liability away.
Moreover, while you might “set and forget” your plan administration, you do so at your own risk of violating important fiduciary duties mandated by ERISA. Furthermore, the plans which are sold by such service providers are often standardized for administrative simplicity; there is nothing administratively simple about such plans and this is a “rose-colored glasses” approach; those service providers cannot provide you with legal counsel when such plans go wrong.
Solution: The best method of alleviating these potential pitfalls is to consult with an employee benefits attorney on the best plan for your business, as well as gaining a clear
picture of your responsibility as plan sponsor and how to satisfy those responsibilities. This option is available, local and affordable for you. The Ratliff Law Firm has
definitive legal strategies to not only provide compliance, but protection from Department of Labor or IRS audits and litigation claims from employees as well.