The Supreme Court’s ruling on health care reform is still pending and the future of the Affordable Care Act remains uncertain. But in the meantime, the law is still in effect. Through recent audit requests on health and welfare plans, the U.S. Department of Labor has started asking employers to prove their plans are currently in compliance with the Affordable Care Act. The audit can be divided into the following categories:
  • Requests as to plans not claiming grandfathered status
  • Requests as to plans claiming grandfathered status.
  • Requests as to plans regardless of grandfathered status.
No matter the type of request, the DOL has been asking to examine documents establishing the plan sponsor’s compliance with the Act.
The DOL has also been checking to see whether a plan is properly accorded grandfathered status under Section 1251 of the ACA. Those inquiries can include the following:
  • Records documenting the terms of the plan on March 23, 2010 (the ACA’s enactment date), along with other additional documents that are required to verify the status of the grandfathered plan. 
  • Disclosure statements involving grandfathered status included in material distributed to participants and beneficiaries describing the benefits that are provided under the plan. 
Under the regulations for the ADA, plans must: provide a specific notice, in any materials that describe the plan’s benefits to participants or beneficiaries, that the plan believes it is a grandfathered health plan; and maintain, and make available upon a government agency’s request, records documenting the terms of the plan or health insurance coverage in effect on March 23, 2012, as necessary to verify, explain or clarify the plan’s grandfathered status.
Inadequate responses to these requests could lead to more inquiries from the DOL and various penalties could be imposed by the DOL and/or the IRS.
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on ADA guidelines. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.