3 Benefit Compliance Areas HR Needs to Monitor

Up until a few months ago, I worked as a director of compliance for a health and welfare benefits consultancy. As part of my job, I would have frequent conversations with external counsel, especially regarding ERISA and Section 125. Whenever I would speak to one attorney in particular, Marilyn Monahan of Monahan Law Office, we always seemed to get off on a tangent about why so many employers aren’t compliant in a few key areas.

Here are our top three employee benefits legal areas where we see employers out of compliance most often:

1.No health & welfare plan document.

Many employers don’t realize that ERISA has two separate documentation requirements: the plan document and the summary plan description (SPD). The plan document is the legal document that establishes and governs the plan; the SPD summarizes the legal terms in the plan document in language that can be understood by the average plan participant.

ERISA outlines the elements that must be included in the plan document, and those elements will not generally be found in an SPD or a carrier’s certificate booklet.

2.Thinking the certificate booklets/evidence of coverage documents provided by health insurance carriers are ERISA-compliant.

Many employers think that if they circulate the certificate booklet or evidence of coverage provided by the insurer or HMO they have satisfied ERISA’s SPD rules. That is generally not the case. More often than not, the documentation provided by the insurer/HMO will not include all of the terms required by ERISA’s SPD content regulations.

Employers can fill in the gaps, however, by having a wrap document that incorporates the insurer/HMO’s documentation and adds the missing essential terms required by ERISA.

3.Incomplete Section 125 cafeteria plan information.

A cafeteria plan is only valid if the plan is committed to writing and the written document contains all the terms the IRS regulations require. For example, if the employer has set up a premium-only plan, a health flexible spending account, or a dependent care flexible spending account, a written plan document is required. In the event of an IRS audit, some of the tax benefits the employer is attempting to achieve could be lost if the employer doesn’t have a valid written cafeteria plan document.

Your list may be different than ours but I’m sure we would all agree on one thing: the employee benefits world has become increasingly more complex from a legal compliance perspective. In these days of increased audits (think HIPAA) and government interest and oversight (think W-2 reporting), it’s more important than ever to make sure you have your legal ducks in a row.

If anything, you may want to seriously consider complying with these three requirements sooner rather than later.

About the Author:

Ed Bray, J.D., is director of employee benefits for a major transportation company in Hawaii.

Reprinted from Employee Benefit News

HR Leaders: How to Be Brilliant in Brief

Several decades ago Henry Mintzberg wrote The Nature of Managerial Work, in which he noted that managerial activity was characterized by its variety, a series of relatively brief interactions that can be incredibly fragmented. He observed that phone calls averaged less than six minutes and typical one-on-one meetings averaged approximately 12 minutes.

In the ensuing years learning and development professionals have observed that days have become even more frantic, and managers are keeping up this hectic pace during longer work days.

One thing that gets sacrificed in these work situations is the leader’s ability to provide inspiration and motivation to the work team. There is never enough time to provide adequate coaching and development to the immediate staff. When you ask today’s managers why they do not provide more development for their subordinates, invariably the answer has to do with time.

In a series of sessions Zenger Folkman has conducted with groups of managers, we asked: “Have you ever received coaching from a manager that had a marked impact on your personal development?” The majority of participants said yes. Then we asked: “How long did these coaching conversations take?”

The majority of people indicated it took less than 15 minutes.

One of the key skills for leaders in today’s world is the ability to manage brief interactions. Every leader needs to make good use of short time bursts during the day to be successful in carving out time for more meaningful discussions having to do with longer-term career issues. The keys to managing brief interactions are identified in the following six rules:

1. Pick up the pace when you are in the driver’s seat. You can dive directly to the heart of the matter. If the leader is trying to determine the heartbeat of the organization, the question may be something like: “Tell me something you think I don’t know and probably don’t want to hear.” Note that it need not take long.

2. Gently guide others when they initiate the meeting. If someone drops into your office and obviously wants to have a leisurely chat, you can hasten the pace of that dialogue. Try standing up and having the conversation near the doorway or announcing that you’re under a tight time crunch and have only a couple of minutes available now, but that you could reschedule a later time.

3. Train colleagues what to expect from you. Subordinates and colleagues may drop by your office to discuss a topic of interest to them. If they become aware that your question will always be, “What have you been thinking about regarding this topic?” it won’t take many conversations for them to realize they should come with some proposal in mind if they raise an issue.

4. Schedule shorter meetings. I worked for a number of years in an organization in which one of the key executives was essentially a part-time employee. His assistant was sometimes instructed to schedule a three-minute meeting with one of his direct reports. While some were taken aback, it forced them to come with a clearly planned agenda to make use of the short time.

5. Make staff and work team meetings more efficient. Some of the most frequent complaints in corporate America are those swirling around the variety of meetings held. Enabling such meetings to be more efficient is one of the big opportunities for leaders to create more time for themselves.

6. Schedule periodic open times for free-wheeling discussion. This recommendation may seem contrary to the earlier ones. The point is, if your colleagues know there are times set aside for open-ended discussions, your practice to speedily push through operational items will be balanced.

If leaders manage their time with greater efficiency, leaving time for more significant matters, the bonds between them and their subordinates will be strengthened, the team will put forth extra effort, the best people will stay and the organization will prosper.

About the Author:

Jack Zenger is the co-founder and CEO of Zenger Folkman, a strengths-based leadership development firm. Reprinted from Chief Learning Officer magazine

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