Department of Labor Audits

The Department of Labor (DOL) is ramping up their enforcement activities, and employer-sponsored health plans and Plan Documents just might be their new favorite target.

When sponsoring a group health plan, another “hat” that most employers wear includes fiduciary responsibilities that fall under the Employee Retirement Income Security Act (ERISA).  Even though most fully insured carriers have the fiduciary responsibility to pay claims and ensure that the benefit plan runs smoothly, ERISA also outlines requirements for person(s) or entities that are involved with the administration of a plan.   Payroll deduction of employee contributions is one activity that subjects most employers to ERISA standards.  Following is a section from the DOL website that briefly discusses this.

How Do These Responsibilities Affect The Operation Of The Plan?

Even if employers hire third-party service providers or use internal administrative committees to manage the plan, there are still certain functions that can make an employer a fiduciary.

Employee Contributions

If a plan provides for salary reductions from employees’ paychecks for contribution to the plan or participants make payments directly, such as the payment of COBRA premiums, then the employer must deposit the contributions in a plan trust in a timely manner. The law requires that participant contributions be deposited in the plan as soon as it is reasonably possible to segregate them from the company’s assets, but no later than 90 days from the date on which the participant contributions are withheld or received by the employer.  Read more here.

For more information and answers on how we might help you with compliance*, feel free to contact me at:, or via phone at (260) 484-7010.

*Note:  Indiana Department of Insurance restrictions/limitations may apply.