Spooky Compliance Monsters: Common Compliance Errors During Open Enrollment

As the chilling winds of October sweep in, it’s time for the spookiest event of the year: Open Enrollment. Don’t let your benefits decisions haunt you all year long. Take control of your health and welfare, and make sure you’re fully compliant before the open enrollment period closes. Here’s what you need to know to avoid the scariest compliance mistakes. 

Below, we explore some of the spookiest compliance monsters to dodge, offering tips to keep your benefits magic in line with federal and state regulations, ensuring your open enrollment doesn’t turn into a compliance nightmare. 

The Curse of Missing ACA Reporting Deadlines: Penalties Lurking in the Shadows

Failing to meet Affordable Care Act (ACA) reporting deadlines is like summoning a compliance monster that haunts your organization long after open enrollment ends. Employers must file critical forms such as 1095-B and 1095-C with the IRS to prove compliance with ACA mandates. Missing these deadlines—or submitting inaccurate information—can trigger penalties that feel like a curse, draining your budget and resources. 

How to Break the Curse: Don’t rely on magic alone! Create a detailed ACA reporting schedule and keep a crystal ball (or digital tracker) handy to monitor employee hours worked, coverage options, and benefits changes. Leveraging a benefits administration system can streamline data collection and ensure you’re fully compliant with ACA requirements. 

The Bewitching Mistake of Incomplete or Outdated Plan Documents

One of the most terrifying compliance traps is sending out incomplete or outdated Summary Plan Descriptions (SPDs) or Summary of Benefits and Coverage (SBCs). Under ERISA, these documents must clearly explain the benefits available to employees. If you fail to distribute updated SPDs and SBCs, compliance ghouls could come knocking at your door with penalties and enforcement actions. 

How to Avoid the Hex: Make sure to review SPDs and SBCs annually and update them with any plan changes or regulatory updates. Once your documents are in order, distribute them to employees within the required document’s timeframe. Publishing digital versions of SPDs and SBCs can also ensure that employees always have access to the most up-to-date benefits information, which helps avoid any confusion or compliance issues down the road. 

COBRA Non-Compliance: Beware the Forgotten

COBRA compliance is another area prone to haunting errors. Under COBRA, employees who lose their benefits due to a “qualifying event,” such as termination or reduction of hours, must be notified and given the opportunity to continue their health coverage. Failing to send timely notifications invites penalties that can haunt your HR team for years. 

How to Ward Off the Tricksters: Automate your COBRA notification process to ensure timely communication with affected employees. Creating a detailed COBRA compliance checklist and using benefits administration software to track and manage COBRA notifications can save you from scary penalties and missed deadlines. 

HIPAA Horror Show: Failing to Protect Employee Data

Open enrollment often involves handling sensitive personal data, including employees’ medical histories and financial information. Failing to protect this data under HIPAA regulations could lead to a compliance nightmare. Data breaches or privacy violations can result in hefty fines and reputation-damaging incidents that may haunt your company for years. 

How to Escape the Horror: Train your benefits team on HIPAA privacy rules at the start of each open enrollment season. Ensure that you have secure systems in place to handle, store, and transmit personal health information (PHI). If you use third-party vendors, make sure they adhere to strict data protection protocols to keep employee information safe. 

The Vanishing Act: Failing to Document Employee Elections

One of the most frightening mistakes during open enrollment is failing to properly document employee benefit elections. Without solid records, it’s as if employee choices vanish into thin air, leading to spooky disputes and, worse, compliance issues, especially under ACA mandates, where proof of benefit offers is essential. 

How to Keep Records from Vanishing: A digital benefits administration system can automate the tracking of employee elections, providing an audit trail in case of future disputes. Always confirm employee benefit selections and provide them with a written or digital confirmation of their choices to prevent any eerie miscommunications later. 

Neglecting Benefits Audits: A Haunting Oversight

Not regularly auditing your benefits offerings and employee contributions is like ignoring the strange noises coming from the attic—it may seem harmless at first, but it’s only a matter of time before something terrifying happens. Inaccuracies in employee contributions or mismatched benefits can lead to serious compliance scares, especially with ERISA and ACA requirements. 

How to Avoid Being Haunted: Conduct regular audits of your benefits programs to ensure they comply with both federal and state regulations. These audits should examine benefits eligibility, employee contributions, and any discrepancies that could lead to compliance violations. Regular reviews will unearth these compliance monsters before they cause any real harm. 

Conclusion: Cast a Spell of Compliance Success

Open enrollment doesn’t have to be filled with compliance monsters lurking around every corner. By keeping an eye on ACA reporting deadlines, updating plan documents, managing COBRA notifications, protecting sensitive data, documenting employee elections, and conducting regular audits, you can cast a spell of compliance success. Stay vigilant, and your benefits process will remain smooth and compliant throughout open enrollment. 

If you need help keeping your compliance potions in order, consider consulting a benefits compliance expert or using specialized software to guide you through the eerie world of open enrollment. With the right tools and knowledge, you’ll keep those compliance monsters at bay and ensure your organization stays safe from penalties.