Historically, the Employee Benefits Security Administration (“EBSA”) has used its resources to monitor and audit employee benefit pension plans.  Responses to those audits typically require significant man hours and efforts by an employer.

In anticipation of the implementation of the Patient Protection and Affordable Care Act (the “PPACA”), the EBSA announced that it has begun to shift its resources to audit employee welfare benefit plans.

Due to the EBSA’s anticipated increased scrutiny of employee welfare benefit plans, it is recommended that employers implement measures to ensure that they are prepared to provide the EBSA auditors with documents that demonstrate compliance with the PPACA.  The following is a laundry list of documents that an employer should anticipate will be sought by the EBSA:

  • Documents that demonstrate that the plan qualifies as a grandfathered healthcare plan.  Importantly, grandfathered plans are exempt from some of the PPACA’s key consumer protections including providing preventative services free of charge and guaranteeing access to a physician or provider of one’s choice;
  • Documents evidencing that notice was provided to participants  informing them that the plan  provides coverage for dependents up to age 26;
  • Documents evidencing  that notice was provided  to participants advising them about access to preventative healthcare and emergency services  benefits;
  • Documents evidencing that notice was provided to participants explaining the plan’s internal claims and appeals procedures as well as  the external review of adverse benefit determinations; and
  • A list of plan participants who have had their benefits rescinded and the reasons for the rescission.

In sum, a prudent employer should begin to proactively respond to the onslaught of EBSA audits of its employee welfare benefit plans.