Department of Labor Audies

By Linda M. Ellis, SPHR, CEBS

Under ERISA, the Department of Labor (DOL) has broad authority to investigate or audit a company’s health plan for compliance with various federal laws. In connection with an investigation or audit, the DOL generally requires submission of records or documents related to an employee benefit plan. Typically, an employer first learns that its employee benefit plan has been selected for a DOL audit when it receives a letter from the DOL explaining the audit and requesting certain records or documents.

Recently, the DOL expanded its investigative authority by expanding the scope of its health care audit letters to include new requirements of the Affordable Care Act (ACA). In addition, the DOL has stated a goal to audit every American business for Compliance by 2018. Employers need to ensure they are prepared to respond correctly to the DOL requests.

The DOL’s audit requests related to ACA compliance have been divided into three categories: (1) requests for grandfathered plans; (2) requests for non-grandfathered plans; and (3) requests for all health plans.

Some of ACA’s mandates apply to all health plans, regardless of whether they have grandfathered status. For example, all plans must provide dependent coverage up to age 26 and must comply with ACA’s restrictions on rescissions of coverage and lifetime and annual limits on essential health benefits.

Employers should be prepared to produce the required documentation to demonstrate their compliance with ACA. Employers should maintain and be able to produce:

  • Records of the steps they have taken to comply with ACA’s requirements, including plan participation information and communications with participants,
  • Plan amendments or procedures that were adopted to comply with ACA, as well as contracts or agreements with service providers, and
  • Notices that were provided under ACA, such as the notice of grandfathered status and notice of enrollment for children up to age 26.

Also, if a plan’s ACA compliance documents are maintained by a service provider, the employer should make sure the service provider is retaining the necessary documents and will be able to produce them upon request.


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