Anyone lately had a visit from the US DOL for Welfare Plan Audit?

This probably goes under the "Benefits" section, but I think this one gets more traffic.
Guess what I received on Friday? A call from the US Dept of Labor who is going to be visiting us in Feb. for a Welfare Plan Audit (Group Insurance.)

I just wondered if anyone has had them visit lately and what they look at. We are waiting for their letter to prepare us for their visit. It has been many years since I have "participated" in this.

We can't figure out why we are being targeted, but have had IRS-401(k) Audit, Regular IRS Audit, State (property, I think) Audit, OSHA Audit and now this in about the last 18 months. Some how they have our number. It does take so much time to get stuff ready and answer their questions. However, so far so good.
Will keep you informed of our outcome.

E Wart


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  • I had that audit last year. What they were looking for was:

    #1. Were all employees elgible for insurance enrolled or if not did you have waiver's in place stating that they did not wish to be enrolled.

    #2. Cobra violations...any violations.

    #3. Did all employees have equal discrimination in favor of managers or key employees.

    #4. Timeliness of payment of claims.

    #5. Proof of annual planning meetings and annual enrollment meetings for the employees. Handouts and other literature explaining the insurance to them. Basically did we education our employees on our benefit plan.

    #6. Timely payment of invoices.

    It was not a bad audit and not as intense as the 401K audit which we also had last year. I think they are targeting Insurance and 401K.

  • Well, I got "the" letter and thought I would let you know what they are looking at in case anyone is interested.
    Employee Benefits Security Administration of the US Dept of Labor
    1. Current Plan Document & SPD and all amendments
    2. Administrative Service Contract between us and all Plan insurers and TPA
    3. Annual Report, Form 5500
    4 Payroll records sufficient to show all money withheld from participants
    5 Bank account records sufficient to show all funding
    6. Bank records to show all premium payments
    7 Correspondence between Plan Participants and Plan or employer
    8 Correspondence conerngin Plan matter between Plan and Plan insurers or TPA
    9 Stop Loss insurance or reinsurance contracts
    10 Acturial feasibility or marking info poissed by Plan
    11. Name and address and telephone number of insurance agents

    Duplicate copies of the following that can be retained
    Sample HIPAA Certificates of Credible Coverage
    Sample Notices of Pre-existing Condition Exclusion Provided to Participants
    3. Notices of Specail Enrollment Righ6ts
    4. Notices sent to Plan Participants under the WHCRA

    Review could be expanded toi othe rPlans sponsored by the Plan Sponsor.

    E Wart
  • In case anyone is interested, I thought I would follow up with my earlier post on our US DOL group medical plan audit.
    Well, after about 5 months we receive dour "letter". They did look at the things mentioned below but also a lot of other things. Really interested in our funding, financials, etc. Didn't seem to care about COBRA and HIPAA, which I was expecting.
    We are self insured. The one thing they did seem to harp on and had us correct was our insurance bond. They said "it was determined that th fidelity bond to cover the plan was inadequate under the requirements set forth in ERISA. Specifically, the bond held did not name the Plan as an insured entity. The bond di dnot contain a "pay-over rider" which provides reimburssement collected on the bond for the benefit and use of the Plan suffering ht eloss. The bond di dnot cover all employees who handle Plan funds. Finally, the bond did not have a discovery period of no less than one year after the termina6tion or cancellation of the bond."
    When these were brought to your attention the bond was modified. Since we took appropriate corrective action, it is concluded and no further action by the DOL is contiplated.
    We had a fairly new agent (who was with PWHCL previously) who was very nice. When they told us about this bond needing to be corrected, our agent nor the insurance company new what they meant and we called the DOL and they couldn't answer it either. They had to call us back.
    Just thought that if you are self insured, you may want to look into this.
    I still think this audit was caused by an angry employee who had resigned and was upset about the unemployment hearing.

    E Wart
  • Thanks for the update!

    I hope the angry ex-employee is done grasping at straws.
  • E, thanks for the follow up. It was very informative.

    How large is your company, how many employees or FTEs? That's a drag about the multiple audits, and scary if you've got an angry ex-employee (or current?) on a campaign that last 18 months... do you think that's what's going on?

  • We are a manufacturing company with 217 employees in 8 different locations.
    I don't think the Retirement Plan was because of an angry employee. I am not sure what caused this visit or the visit from the state. However, the group insurance was either referral from the Retirement Plan visit (which would stand to reason since both through the IRS) or from an angry employee. However, for some reason I think if it was an angry employee it would have been the Labor Dept. Could be that they are just "out to get an industry. Who knows. They wouldn't say.
    E Wart
  • We have been hit with multiple audits also, I am just finishing up the 401K Audit this week. I had the insurance one earlier.

    We also had a state audit.

    I am wondering if it is because we also have multiple locations. I had kind of wondered if it was because we had both US and International locations.

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