By: Chris Vogel, CEBS​

If you’re a trustee or administrator of a self-funded or fully insured health and welfare plan covered by ERISA, be forewarned: The Department of Labor is ramping up audits of health plans.

Ian Dingwall, chief accountant in the Office of the Chief Accountant at DOL’s Employee Benefits Security Administration, recently told the Foundation that a strong DOL priority moving forward is looking at health plans. The department has asked for additional funding and training programs and plans to hire additional staff. Can your plan documents pass a DOL inspection? Consider the areas of DOL focus and review your plans for compliance. Preparation is the key to a successful audit. ​


DOL health plan audits will focus on:

  • ACA compliance. Are plans making changes mandated by the Affordable Care Act (ACA)​—and changing their design and plan documents? Are they communicating changes sufficiently (or at all) to participants in the summary of benefits and coverage, summaries of material modifications, etc.?
  • Claims denials. This is a big concern. Dingwall says DOL has the sense that a large number of claims are being denied and few are being appealed. Officials worry that participants aren’t being given adequate information about the claims appeal process. They also are concerned that emergency room claims are being denied as “unnecessary.” Dingwall gave the example of someone who thinks he’s having a heart attack, goes to the ER and finds out he has indigestion.
  • Lack of fee transparency/disclosure. Participants are being charged the wrong amount for procedures and products—But they likely have no idea what the correct amount is. Drug claims are one example, since how a drug is delivered—as a pharmacy expense or a medical expense—can affect how a claim is filed.

In an article in the November Benefits Magazine​, employee benefit consultant Mary B. Andersen, CEBS, provides some very practical information and advice about DOL health audits—which she calls a “combination of art and science.” Andersen is president and founder of ERISAdiagnostics in Exton, Pennsylvania.

When the agency sends a letter telling your plan it will be conducting an audit, DOL will ask for a long list of documents. Andersen suggests the plan should immediately ask for additional time to assemble the documents.

​[Related: All the resources you need to stay compliant,
in one place
ACA University.]

You don’t want to put together a sloppy document package, and you want to make sure the person who’ll answer the auditor’s questions knows what he or she is talking about and is prepared to cooperate fully with the auditor. Otherwise, the audit likely will take a lot longer, and DOL may even decide to take a look at your other benefit plans as well.

Andersen adds a final piece of advice: Consider doing periodic self-audits. That way, you may discover any issues—and fix them—before DOL gets involved.


Chris Vogel, CEBS

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