Small Business Responsibilities
To meet their responsibilities as plan sponsors, employers need to understand some basic rules, specifically the Employee Retirement Income Security Act (ERISA). ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries). An ERISA-covered group health plan is an employment-based plan that provides coverage for medical care, including hospitalization, sickness, prescription drugs, vision, or dental. A group health plan can provide benefits by using funds in a plan trust, the purchase of insurance, or by self-funding benefits from the employer’s general assets.
ARE YOU COMPLIANT?
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
The Health Insurance Portability and Accountability Act (HIPAA) provides rights and protections for participants and beneficiaries in group health plans. HIPAA includes protections for coverage under group health plans that limit exclusions for preexisting conditions; prohibit discrimination against employees and dependents based on their health status; and allow a special opportunity to enroll in a new plan to individuals in certain circumstances.
Minimum Essential Coverage (MEC)
The minimum essential coverage is the minimal amount of coverage you will need in order to avoid having a penalty or fee under the Affordable Care Act (aka Obamacare).
Summary Description Plan (SPD)
ERISA requires group health plans to have a written plan document in place, and to provide a summary plan description (SPD) to plan participants upon enrollment in the plan, among other times.
The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses.