The complexity of demonstrating proper compliance with Health related programs is only one more headache employers need to deal with. Proper compliance is essential in order to avoid costly fines (many are $100-$250/employee per day) and penalties from the Department of Labor (DOL). Many smaller companies, with human resources staff already pushing the limit from the normal stresses of HR issues (including regulations, compliance, claims etc), might be at risk for noncompliance issues regarding healthcare. An article from the March 2012 issue of CFO magazine highlights the need for all companies to remain vigilant in order to avoid fines & penalties from the DOL.
Health care compliance is complex and challenging for companies due to the myriad of regulations affecting the healthcare industry. While most companies do their best to remain compliant, something simple may fall through the cracks. Since the introduction of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the DOL is becoming more aggressive about enforcing compliance. HIPAA calls for severe civil and criminal fines and penalties for non-compliance. Some of the fines are mentioned in the article and can be quite substantial.
As example used in the article is the requirement to maintain plan documents – a technical document that details plan compliance with Employee Retirement Income Security Act (ERISA). The insurance contract is not sufficient to meet ERISA’s standards for plan documents. The insurance contract, plan document, and summary plan document (for participants) are all required under the rules of ERISA.
The article focuses on smaller companies; however all companies, no matter what the size or industry, have compliance regulations. Larger companies tend to have more regulations, so the risk exposure is even greater. Additionally, with the passage of healthcare reform, the new administration and reporting requirements will add to the potential risk and exposure to a compliance oversight and an audit from the DOL.
It is critical for a company to take a comprehensive approach to healthcare compliance and risk management to lower business risks and ensure regulatory compliance. An independent insurance and risk management consulting firm can provide solutions to facilitate sustainable compliance ensuring the policies and best practices designed to mitigate risks are in effect.
If you would like to discuss this topic in more detail, or learn more about healthcare compliance solutions, please do not hesitate to contact Albert Sica at 732.395.4251 or at [email protected].
