Today’s post was written by Skylar Ross.
Maintaining sufficient compliance protocols is absolutely essential for HR professionals. After all, there’s a lot at stake! Fines, fees, and legal procedures can all follow when compliance requirements are not adequately met, which can put the entire company in hot water.
But beyond simply staying up to par with legal and fiduciary regulations, keeping a strong focus on benefits compliance tasks can help employees develop a better understanding of their rights and opportunities as well, resulting in a much more harmonious workplace.
Not sure if your current setup is ticking all the boxes? Take a look at these six tips that can help HR professionals enhance employee fringe benefits compliance so that the employees and the company are both sufficiently covered.
Keep Tabs on Company Growth
With the start-up economy experiencing outstanding growth, it’s common for organizations to double or triple their workforce within a year. Company size has a direct correlation to health care coverage compliance, with the Affordable Care Act (ACA) setting specific benchmarks on company size and coverage. For example, companies with 50 or more full-time workers must provide benefits to at least 95% of their employees, whereas companies with fewer than 50 full-time workers have a different set of ACA regulations to follow. To ensure the company is playing by the rules, it’s essential to keep regular tabs on company growth.
Clarify Hourly Measurement
Because benefits often correlate to part-time or full-time status, it’s important to clarify exactly how and when hours are measured to determine an employee’s status. Many companies define the measurement period as starting and ending on the first and last days of the calendar month, respectively. An average is tallied, with 30+ hours a week typically triggering full-time status. However, there are multiple ways to arrange a measurement period. The key is to clearly define the measurement guidelines so that employees and HR administrators are on the same page.
Define Plan Year and Open Enrollment Period
All organizations should define a specific plan year, and then hold an open enrollment period before the start of that plan year. An open enrollment period should allow employees enough time to review their coverage options and make changes to their plan as needed. However, it’s important to enforce the closing of the enrollment period. Changes made in the middle of a defined plan year are not allowed and may break insurance provider agreements. Exceptions include employees with a qualifying life-changing event, like marriage or the birth of a child.
Always Review Contracts with Service Providers
Though annual service provider contract reviews can be labor-intensive, they are absolutely necessary to ensure minor contract changes don’t add up to big expenses and risks for the company. Even slight changes to confidentiality clauses or service fees can have big repercussions. Always review contracts with service providers annually — and pay attention to the details!
Distribute Notices and Disclosures
A major part of benefits compliance is releasing clear and timely communications that update employees on changes to agreements, deadlines, and other policy details. Notices and disclosures must be distributed effectively. In other words, a short email usually doesn’t cut it! Changes to benefits and other important disclosures may merit a sit-down meeting, postings on a notice board, or a thorough explanation to department heads on the implications that can be expected. Plus, the consequences are hefty, as failure to distribute notices effectively can result in lawsuits, tax penalties, and other significant actions.
Consider Evolving Risk Policies
Keeping employee risk policies up to date is another way to enhance compliance protocols. Try to revise generic, one-size-fits-all risk policies into more specific explanations that target the risks relevant to employees. More recently, a very common aspect of risk management concerns intellectual property, especially when an employee leaves the company. With more individuals working from home or doing business from a mobile device, it’s critical to keep intellectual property risks updated and clearly communicated.
With renewed dedication and targeted goals, every HR team can get equipped to enhance their benefits compliance procedures and create a more successful environment for all involved.