It’s almost Halloween, and I’ve been thinking about some of the scary conversations I’ve had with employers over the last couple of months.
One comes to mind right away. I had a compliance meeting with a new client, trying get a feel for their knowledge of the laws that apply to benefits plans. The business employs about 125 people. When I asked how they manage COBRA, I got a pretty blank stare. I asked who sends out the COBRA notice when employees terminate, and I was told people don’t leave the company that often. Finally, I asked about the initial COBRA notice for new enrollees, and the response was, “What’s that?”
We’ll certainly be able to help this client to dramatically improve their compliance efforts, but the thing that’s really scary is how common this is. I would argue that the majority of employers I meet for the first time are missing one or more very basic items in their benefits compliance efforts.
At the end of our meeting, this client said, “I’m so glad you’re explaining this stuff to me. I don’t know what I don’t know.” That’s a phrase that’s been around for many years, but it’s spot on with benefits compliance. I’ve used it dozens of times, but in the form of a question: “Do you know what you don’t know?”
Common compliance mistakes relate to COBRA, ERISA, Section 125, the ACA, Section 105, Section 79, benefits notices, and so on. Some of these mistakes have the potential to cost an employer thousands of dollars if they aren’t corrected. Like many laws, not knowing that the law exists will rarely be a sufficient defense.
The old adage said, “What you don’t know can’t hurt you.” In this case, I’d restate to say, “What you don’t know should scare you.”
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