How Often Should I Review My Company’s Employee Benefits Plan?
Annual review ensures your current benefit offerings comply with changing lawsBy Benjy Schirm, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on December 6, 2023 Featuring practical insights from contributing attorney Malaika K. Caldwell
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Business owners are busy. There are constantly new challenges, meaning that, with each passing year, every business should examine its controlling documentation, employee eligibility, and the benefits it offers.
However, keeping up with benefits law isn’t at the top of the list for most business owners. So, we sat down with employee benefits attorney Malaika Caldwell to discuss the sort of changes you need to be aware of.
The Law Governing Employee Benefits
The federal 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 should contact their attorneys to ensure compliance with these regulations and eligibility requirements.
Here are some examples of issues business owners should be checking to make sure their employee benefits packages are covered.
1. Status of Independent Contractors
“The Affordable Care Act (ACA) has been a huge change in making employers look at their employee base for health care,” Caldwell says. “For decades, many employers listed many employees as independent contractors, so they weren’t eligible for benefits. The ACA qualified many of those people as [full-time] employees rather than independent contractors, meaning they had to be offered benefits.”
2. Changes to the IRS Determination Letter Program
Through the Internal Revenue Service (IRS), the federal government had a determination letter program for decades. Companies with a benefits program could simply contact the IRS and get a favorable determination on 401(k) retirement plans.
“This acted as a sort of blessing from the IRS that your plan complies 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.” In its 2019-2020 Revenue Procedure, the IRS opened the determination letter program for hybrid and merged plans.
“In analyzing a company’s plan, [a lawyer] can ensure they are annually up to par in compliance… Reviewing each year is best practice,” adds Caldwell.
3. Mental Health Parity Act
According to Caldwell, the Mental Health Parity Act requires that companies offer additional benefits for various mental health and therapy programs. If your benefits package doesn’t contain these offerings, there is a high likelihood of being out of compliance.
Find an Experienced Employment Law Attorney
With just these considerations, business owners often must rewrite entire health insurance policies and communicate these changes to all of their employees. It is best practice to have your benefits plan reviewed annually to ensure compliance and employee well-being.
To do so efficiently and properly, visit the Super Lawyers directory to find a reputable and experienced employee benefits attorney in your area. An attorney can also answer your questions about insurance plan health coverage.
For more information about this area, see our overview of employment law.
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