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Better Safe Than Sorry: Preparing for a DOL Health and Welfare Plan Audit
Although the federal Department of Labor (DOL) has a history of rigorously auditing 401(k) and pension plan compliance, health and welfare plans have not been as high on the agency’s agenda. In 2000, the DOL began auditing health and welfare plan audits, focusing on a sample of employers to measure compliance with, among other laws, the pre-existing condition exclusion requirements under the Health Insurance Portability and Accountability Act (HIPAA). A representative of the DOL recently informed a national audience of benefits lawyers that these “random selection” audits ceased in 2003, and it appears that the DOL is intensifying its health and welfare plan audit activities in response to specific complaints. A DOL audit can present a significant burden for employers, given the volume of documentation the agency asks to review, and the penalties imposed for findings of noncompliance can be considerable, depending on the particular statutory requirement in question. The following checklist highlights issues you may want to review to avoid potential problems, should the DOL come calling.