Welfare Benefit Plan ERISA News
October 2013

Revised SBCs Required for 2014
The DOL issued a revised SBC template on April 23, 2013. It added two new sections to the SBC: 1) "Does this Coverage Provide Minimum Essential Coverage? The Affordable Care Act requires most people to have health care coverage that qualifies as "minimum essential coverage." This plan or policy [does/does not] provide minimum essential coverage," and 2) "Does this Coverage Meet the Minimum Value Standard? The Affordable Care Act establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60% (actuarial value). This health coverage [does/does not] meet the minimum value standard for the benefits it provides."
SBCs must be distributed with open enrollment materials for the next plan year or, if the plan does not conduct open enrollment, 30 days before the start of the plan year. Employers must also provide an SBC to new enrollees, including special enrollees, and to provide an SBC and/or the government's uniform glossary of terms upon request. DOL FAQs
HIPAA Privacy Notices: Procrastination Pays Off!
HHS announced 4 new model notices: A Notice in the form of a booklet; A layered notice that presents a summary of the information on the first page, followed by the full content on the following pages; A notice with the design elements found in the booklet, but formatted for full page presentation; and A text only version of the layered notice. More
No Pain, No Gain
"Losing hurts worse than winning feels good," says behavioral economist John Moses, Ph.D. This interesting article offers practical advice on creating more powerful, effective messages that will lead to people taking action. One principle is "framing" the message properly. People are highly motivated to avoid something they would consider a loss. They respond better in some instances to a "loss-framed" message like "Stop Losing Money!" than to a "gain-framed" message like "Start Saving Money!" Another principle is using "social norms" and individual testimonials rather than a logical approach in the message. People strive to do what is socially expected and acceptable more than they respond to logic. The article centers on how employers can use behavioral economics to motivate employees to make benefit choices that are in their best interests. However, the same principles can be applied in many other areas, such as sales, personal relationships, or fund raising.
The Dishonor System
A user's guide to committing fraud on the Obama­care exchanges
The author, Christopher Conover's, purpose is to inform readers "just how tempting fraud on the Obamacare health insurance exchanges will be in light of the recently announced delays in employer reporting and employer mandates. There are three types of fraud worth considering, each reflecting different motivations and degrees of risk tolerance among the hypothetical individuals considered." (The Weekly Standard)
ERISA Trivia

Last month we asked "My company had just 22 participants in our health plan at the beginning of its plan year. Am I required to file Form 5500 for it even though we don't have an SPD?" The answer is generally "yes." However, there is a small plan (<100) exemption if 1) contributions by participants are forwarded by the employer within 3 months of receipt, 2) in the case of an insured plan, refunds to which contributing participants are entitled (e.g., MLR rebates) are returned to them within 3 months of receipt by the employer, and 3) contributing participants are informed upon entry into the plan of the plan any provisions concerning the allocation of refunds (a "refund allocation policy"). Therefore, even a small employer is required to file Form 5500 if it does not have a refund allocation policy, a provision found in a well drafted SPD.

The small plan exemption for 5500s does not exempt the employer from the requirement to furnish SPDs to participants and beneficiaries. In our experience, many, if not most, small employers do not have an SPD or a refund allocation policy. Such employers are not eligible for the exemption and must file a 5500. The penalty for not filing Form 5500 can be as high as $1,100/day. The solution is for small employers to have an SPD that provides certain legal protections in addition to the small plan filing exemption.


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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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