BASE^® Blog

Nothing would be scarier, or haunt a business for years to come more than being found NOT compliant with ERISA.  But by having a compliant and up-to-date Plan Document and Summary Plan Description, the risk for steep penalties can be non-existent like a ghost. 

The Employee Retirement Income Security Act of 1974 (ERISA) requires that each employer/plan administrator maintain Written Plan Documents and the Summary Plan Description (SPD).  The written Plan Document is a contract between the employer and employees to establish the plan.  It’s the document that sets forth the rights of the plan’s participants and beneficiaries.  The SPD is a document that provides a summary of the key information about an employer’s benefit plan and any other additional information required by ERISA.    

The BASE® ERISA Wrap is designed to help employers/plan administrators fulfill the ERISA requirements for sponsoring health benefits.  Like the cloth on a mummy, it wraps around the existing certificates of insurance and benefit plan booklets to provide the required provisions and information to comply with ERISA. 

Steep penalties could haunt an employer/plan administrator if they do not provide an SPD or have a current Plan Document.  Failure to provide an SPD or Plan Document to a plan participant or beneficiary, after receiving the request, can result in a penalty of up to $110/day per participant for each violation.  Not only could a business be required to pay out steep penalties, but it could also trigger a deeper plan audit by the US Department of Labor (DOL). 

Get out your flashlight, I am going to tell you a haunting story:

In 2019, Kinsinger v. SmartCore LLC was a court case that involved an employer’s group health plan and the subsequent failure to pay for the premiums.  The carrier had cancelled coverage for nonpayment, leaving the employees with several unpaid medical bills.  Throughout the process, the plaintiffs requested the documents within the scope of ERISA, the Summary Plan Description (SPD), Plan Documents, and other information from the plan administrator.  The plan administrator didn’t respond for over 700 days and was sued due to the requested documents not being provided before the initial 30-day period.  In the end, the court awarded the plaintiff a total of $41,140 for receiving their information that they requested, late. 

So, what can you learn from this haunting tale?  The document requests under ERISA must be promptly addressed and acted upon in good faith, and if not, can result in some serious fines. 

Having the ERISA Wrap in place is neither scary nor expensive.  So, ERISA plan administrators BEWARE!  Failure to provide Plan Documents may result in steep penalties.  For more information on the BASE® ERISA Wrap, or to watch a short video, call 888.386.9680 or visit www.BASEonline.com.

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National HSA Awareness Day is October 15, 2021.  It is a day to learn about the value HSAs can bring to employees and the reasons to provide an HSA in a business.  HSAs make employees feel like they can control and manage their money the way they want to.  Whether it be using an HSA for a pre-qualified medical expense or saving for retirement, they decide how and when to spend it.  Offering an HSA gives employers a great opportunity to advise their employees on the best decisions for their wellness and financial well-being. 

The BASE® Health Savings Account (HSA) is designed to help individuals save and pay for qualified medical expenses, while allowing the opportunity to save for the future, and/or invest the funds.  This triple tax-advantaged benefit allows employees in a qualifying High Deductible Health Plan (HDHP) to save money on a pre-tax basis to pay for qualifying medical expenses now or in the future.

BASE® is here on this national day, and every day, to drive awareness of the benefits of Health Savings Accounts (HSAs) to help employers and employees to maximize their tax savings. 

Benefits to the EMPLOYER:

• Tax savings. Employee contributions reduce payroll taxes and contributions to employees’ HSAs are tax-deductible.    
• Increased employee satisfaction. An employer can empower their employees with their ability to make better health care decisions, pay for their health care expenses, invest, and/or save for the future. 
• Lower premiums. Employers pay, and save on, lower premiums since the High Deductible Health Plan coverage is more affordable.  This allows employers to use the savings on those premiums to help contribute to their employees’ HSAs. 

Benefits to the EMPLOYEE:

• Lower taxable income. Because their paycheck is taxed AFTER contributions are made, employees will have less income to tax with an increase in take-home pay. 
• Long-term savings with earning potential. Earnings on invested HSA contributions are tax-free.  The funds are not taxed if used for qualified health care expenses, meaning the HSA is a compelling option to consider for long-term retirement planning. 
• Own funds. There is no risk in losing their money if not used in a certain time frame or if they change employers.

So many believe that a business must be a certain size to offer their employees the HSA.  As a low-cost alternative to help keep premiums under control, HSAs are in fact popular among individuals, small businesses, and larger employers.  BASE® is ready to answer your questions and continue to build awareness today, and in the future, so call 888.386.9680 to learn more!

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