Wrap Documents for Welfare Benefits Plans

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers. Under ERISA, employer-sponsored welfare benefit plans, such as group health plans, must be described in a written plan document. Employers may use wrap documents in conjunction with the insurance certificate or benefit booklet in order to satisfy ERISA’s requirements.

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Department of Labor Audit

The Department of Labor (DOL) has the right to conduct an audit of any health plan, which is subject to ERISA. In recent years, DOL audit activity has increased substantially. The best thing you can do to avoid an audit is operate your plan with consistency and attention to key compliance requirements. Documenting this plan operation is the key to successfully getting through an audit should one occur.

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COBRA Continuation Coverage

Employees who lose coverage through an employer health may seek to utilize COBRA to extend that coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA), passed in 1986, is a law with health plan provisions that allows employees to continue health benefits after they leave employment or lose eligibility under the health plan. Whether or not COBRA applies to you and your employees depends on the size of your company. When COBRA does apply, it is important to be in tune with the details regarding eligibility, notice requirements, coverage duration, etc.

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