Your Benefits Package May Be Out of Date

Changes in employment benefits law that Illinois business owners need to know

Business owners are busy. There are constant new challenges, meaning that, with each passing year, every business should examine its controlling documentation and the benefits it offers employees. However, keeping up with benefits law isn’t on the top of the list for most business owners. So, we sat down with employee benefits attorney Malaika Caldwell to show you the changes you need to be in compliance with.

The governing law that controls benefits is ERISA, or the Employee Retirement Income Security Act. There are a lot of documents that the government requires from companies on an annual basis, and people call should call their attorneys on an annual basis to ensure compliance with these regulations. Here is a small slice of what business owners should be checking to make sure they are covered.

Independent Contractors

“The Affordable Care Act [ACA] has been a huge change in making employers look at their employee base,” Caldwell says. “For decades, many employers listed many employees as independent contractors, so they weren’t eligible for benefits. The ACA qualified a lot of those people as employees rather than independent contractors, which meant they had to be offered benefits.” It is an ongoing challenge for employers to make sure they are compliant with the Affordable Care Act.

The Determination Letter Program

The IRS has, for decades, had a determination letter program. For companies with a 401K plan in place, they could simply contact the IRS and get a favorable determination on a 401K. “This acted as a sort of blessing from the IRS, that your plan is compliant with federal law,” says Caldwell. “The IRS did away with that plan in early 2017, and the program was cut down to the bare bones. While you can’t formally submit your plan for a blessing, the IRS does produce annual compliance updates that each company needs to make. In analyzing a company’s plan, we can make sure that they are annually up to par in compliance. Hopefully, the IRS will bring their staffing back up in the future and resume this determination letter program. Until they do, reviewing each year is best practice.”

Mental Health Parity Act

According to Caldwell, the Mental Health Parity Act requires that companies offer various mental health and therapy type programs. If your benefits package doesn’t contain these offerings, there is a high likelihood of being out of compliance. 

With just these considerations, business owners often must rewrite entire policies and communicate these changes to all of their employees. It is best practice to have your benefits plan reviewed annually. To do so efficiently and properly, you must call a reputable and experienced employee benefits attorney.

For more information about this area, see our overviews on labor law and employment law for employers.

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