Employers who sponsor health plans for their employees must be prepared to pass a health plan audit by the U.S. Department of Labor (DOL), recent reports indicate. Since 2009, the DOL has hired hundreds of new auditors to bring increased scrutiny to employer compliance with various laws and regulations. The first areas of emphasis revolved around wage and hour and employee classification issues, but with implementation of the Affordable Care Act nearly complete, health plans are receiving increased attention. The scope of an audit may extend beyond the ACA, however, to other areas including HIPAA, COBRA, and ERISA.

Although the DOL has authority to initiate audits of employers on its own, audits are more commonly triggered by complaints or red flags in plan filings. A DOL audit can last for months or years and involve extensive on-site inspection. If the audit reveals no violations, the DOL will issue a “no-action letter.” On the other hand, if problems are found the DOL can either inform the sponsor of issues that need to be resolved to avoid litigation or take them to court. Unresolved violations can result in civil or criminal penalties for the organization and individuals responsible.

The DOL’s investigations are already producing results. The arm of the DOL responsible for regulatory enforcement, the Employee Benefits Security Administration (EBSA), recovered almost $600 million in fiscal year 2014. It also closed nearly 4,000 civil investigations, filed over 100 civil cases, and indicted over 100 people. The DOL has also entered into partnership agreements with nearly 20 states, including Wisconsin, Illinois, Iowa, and Minnesota, to share information and better coordinate enforcement efforts.

If your organization sponsors a health plan, you owe it to yourself to review your policies and procedures to ensure that you’re prepared for a DOL audit.


Chicago Daily Law Bulletin

Bloomberg BNA

Department of Labor – Agency Results

Department of Labor – Press Release