December, 2007
DOL Auditing Medical Plan
The Department of Labor (DOL) is starting to audit health plans!!! We are currently working with a client in responding to a DOL audit notice. Relying on that old adage “forewarned is forearmed”, we would like to share with you the data that the DOL is requesting in this particular case:
- Plan Document and all amendments.
- Most recent summary plan description.
- Summary annual report for specific years.
- Fidelity bond and Riders/endorsements.
- List of plan managers/service providers.
- Contract(s)/agreements with service providers.
- Form 5500 for year(s) under review.
- A narrative describing the procedures in place for the collection, receipt and recording of health insurance contributions. When and how are employer and employee contributions remitted to the health insurance provider or a third party administrator? What records are maintained to track this process?
- Documents setting forth the rates of employee contributions for plan years under review.
- Fiduciary Liability Insurance Policy (if applicable).
- Proof of payment of insurance premiums and/or claims funding for the period under review.
- A copy of the plan’s general notice of preexisting condition issued to enrollees (including any lists or logs an administrator may keep of issued notices), or proof that the plan does not impose a preexisting condition exclusion.
- Copies of individual notices of preexisting condition exclusion issued to certain individuals per the regulations (including any lists or logs an administrator may keep of issued notices), or proof that the plan does not impose a preexisting condition exclusion.
- Records of claims denied due to the imposition of the preexisting condition exclusion (as well as the plan’s determination and reconsideration of creditable coverage, if applicable), or proof that the plan does not impose a preexisting condition exclusion.
- A copy of the plan’s written procedure regarding participant’s ability request and receive certificates of creditable coverage.
- Certificates of creditable coverage for individuals who lost coverage under the plan or requested certificates, including lists, logs or samples of issued certificates.
- A copy of the plan’s special enrollment notice, including any lists or logs an administrator may keep of issued notices.
- Materials describing any wellness programs or disease management programs offered by the plan. If the program offers a reward based on an individual’s ability to meet a standard related to a health factor, the plan should also include its wellness program disclosure statement regarding the availability of a reasonable alternative.
- The plan’s Newborns’ Act notices (this should appear in the plan’s SPD) including lists or logs of notices an administrator may keep of issued notices.
- Enrollment and annual notices provided under the Women’s Health and Cancer Rights Act, including lists or logs of notices issued.
The DOL is requesting that the material be sent to the DOL investigator who signed the audit letter. The DOL reserves the right to request additional information. The DOL requests that the material be provided within 10 working days of the date of the letter! It is important to keep in mind that for valid business reasons, the DOL may grant an extension of time to provide the information.
We recommend that you review the list and begin to either assemble the required information as in the case of the plan documents and summary plan descriptions or at a minimum identify sources of information for the remaining items. We are in the very early stages of this process and will keep you posted on our progress.
If you should receive a DOL audit letter, please do not hesitate to contact us for assistance.
Note: This material is for the sole purpose of providing general information and does not under any circumstances constitute legal advice and should not be used as a substitute for legal advice. You should seek the advice of counsel when applying the requirements to your plans. For more information on this ErisaALERT, contact us by phone at 610-524-5351 and ask for Mary Andersen.
