Understanding Compliance: Avoid Costly Mistakes

Posted on Jan 13, 2025

Compliance with federal regulations like ERISA, ACA, and COBRA is critical for employers offering benefits programs. Yet, navigating these complex requirements can be overwhelming, especially for small to mid-sized businesses. Noncompliance, whether due to oversight or misunderstanding, can lead to hefty fines, damaged employee trust, and reputational harm. Here are common compliance pitfalls:

• Missed Deadlines: Filing reports like Form 5500 or issuing COBRA notifications late can result in significant IRS penalties.
• Improper Documentation: Incomplete or inaccurate plan documents and Summary Plan Descriptions (SPDs) often lead to compliance issues.
• Mismanagement of Employee Contributions: Mishandling 401(k) contributions or failing nondiscrimination tests can attract audits and fines.
• Lack of Communication: Failure to inform employees of their rights and responsibilities, such as COBRA continuation coverage, can result in lawsuits.

A Third Party Administrator (TPA) specializes in managing benefits programs and ensures compliance with ever-evolving regulations. Here’s how we help:

• Regulatory Expertise: TPAs stay updated on federal and state requirements, providing employers with accurate, timely guidance.
• Streamlined Administration: From preparing required forms to issuing employee notices, TPAs handle the administrative burden, reducing errors.
• Proactive Monitoring: TPAs conduct regular plan audits to identify and address potential issues before they become costly mistakes.
• Employee Support: TPAs ensure employees understand their benefits and rights, minimizing misunderstandings and legal risks.

By partnering with a TPA, employers can focus on growing their business and rest assured that compliance is in capable hands. Avoid costly mistakes by leveraging the expertise of a TPA to navigate the complexities of benefits administration. Staying compliant isn’t just a legal requirement—it’s a way to build trust and protect your business.

This material is provided for informational purposes only, and is not intended as authoritative guidance, legal advice, or assurance of compliance with state and federal regulations.