It may
seem cruel to joke about, but if you’re a small business owner, an audit to
make sure that your company is in compliance with the new healthcare reform
requirements can actually be beneficial.
The intent of this post is to keep you informed on auditing types and
requirements, and how you can properly prepare your organization.
Ask
yourself this – if you have a broker, do they have your back in this process?
Pure Risk Solutions (PRS) specializes
in assisting with performing self-audits, or in preparing for one that may be enforced
by our Federal Government. We are a certified broker, and would love to lend a
hand as an experienced extension of your Human Resources (HR) department. Please
call us at (303)834-1001 with any questions you may have.
To
start, here’s a breakdown of what you can do to prepare your business for a DOL
audit, as well as what the government would ask to see of you to verify that
you are in compliance with the new reform.
Throw an acronym out, you’d
better elaborate – what is a DOL Audit?
‘DOL’
stands for the U.S. Government’s Department of Labor. While the DOL has always
held the right to request an audit, with the advent of Affordable Care Act (ACA
– “Obamacare”) guidelines and restrictions, requirements have been expanded
accordingly. A DOL audit will not only require you to provide proof of ACA
employee health plan compliance, but additional documentation as well.
This
webpage does a great job of expanding upon what documentation would be
required for each of your employee’s healthcare plans – grandfathered or not. It’s
extensive, and a broker can easily help you to find the right information, to
ensure success in the process and make it as quick as possible.
Several types of audits that the
DOL could perform are:
- Compliance: Focuses on how well a business is complying with current federal, state, and local laws and regulations.
- Best Practices: Helps the organization maintain or improve a competitive advantage by comparing its practices with those of companies identified as having exceptional HR practices.
- Strategic: Emphasis is placed on strengths and weaknesses of systems and processes to determine whether they align with the HR department’s and the organization’s strategic plan.
- Function-specific: Focuses on a specific area in the HR function – this could be payroll, performance management, records retention, etc.
So what can Small Business Owners
do to prepare?
First
step – be proactive. Period.
A
self-audit for your business will leave you feeling like you did your homework.
But here’s the best part. We’ll do your
homework for you. How great is that? Think of us as if we’re that nerdy kid
in your calculus class (we love nerds, by the way – no disrespect), who is more
than willing to crank out a few additional functions in return for a smile from
you, the pretty girl, in the hallway during passing periods. Anyway – silly
analogy and the fact that we’ve clearly been watching too many John Hughes
movies lately aside – there are a number of key steps involved in a self-audit
(all of which we specialize in).
A relatively
high-level overview of these steps looks like this:
- Review of job descriptions;
- Understanding of the differences between federal and state laws to ensure that the laws are properly applied to your company’s employees;
- Confirmation that Fair Labor Standards Act (FLSA) classifications of employees are correct;
- Review of payroll records to verify that they have been kept accurately;
- Validation that policies have been applied consistently across the organization;
- Verification that all records are complete, and if not, proper methodology to resolve any inconsistencies;
- Determination of how to address any areas of concern identified in the self-audit (aka – closing the loop).
Also –
obtain your company’s Summary Plan Description (SPD). SPDs are your
group health insurance plan administrator’s description of your legal rights
under the Employee Retirement Income Security Act (ERISA). Each SPD for an
organization should be inclusive of information on co-pay, coverage of
dependents, and includes circumstances under which one of your employee’s could
cancel your health insurance. It’s important to remember that SPDs are not provided by your insurance
carrier. You should obtain your SPD by request of an attorney or legal adviser.
Questions?
Confusion? Again, here at PRS we encourage you to contact us to discuss how we
can help prepare your small business for the audit process, since we know
exactly what to look for to protect you. Our number again is (303)834-1001. Ask
for me, Dave (Godel), or email me at dave@purerisksolutions.com.
Happy Thanksgiving to all on Thursday! Enjoy the family time, food, football, and continuous reruns of ‘Planes, Trains, and Automobiles’ (another John Hughes classic).
