Since its formation by joining 24 benefit brokerages under one banner in 2017, Alera Group has acquired brokerages across the country at a furious rate. The Deerfield, IL-headquartered benefit firm is looking to establish a universal set of compliance best practices and knowledge among its more than 50 Alera Group companies. This week, it hired Danielle Capilla to fill a new role: Director of compliance, employee benefits. While around 12 Alera Group agencies already have compliance experts, Capilla is the first compliance attorney to work for the firm. The adjunct law professor at DePaul University and veteran of United Benefits Advisors spoke with Employee Benefit Advisor about her new role and what employers and brokers need to know what is looming on the compliance horizon.
Employee Benefit Adviser: You are the new director of compliance for employee benefits for Alera Group, and the first person to hold this new role. What's your mission at Alera Group?
Danielle Capilla, Alera Group: Until now, Alera Group agencies could either have an in-house compliance expert or they could rely on resources from ThinkHR and a compliance law firm, which is great but it didn't always get down into the nitty gritty details. I will be able to complement the outside resources that already exist and the 12 or so inside compliance folks that are already within some Alera agencies and then find solutions and scale them so all Alera agencies have access to whatever resource that falls under compliance, whether it's answering day-to-day questions or determining the best way to file 5500s for all Alera clients.
EBA: How important is compliance to benefit firms? They don’t want an ERISA audit, do they?
Capilla: No, it's a client’s biggest fear but also the least exciting thing that they work on. Clients are good at whatever their business is, brokers are good at benefits and no one wants to be the person who has to understand the legal complexities on the back end and I get that.
EBA: Is this a brand new role for Alera Group?
Capilla: It is. They were talking to agencies about their biggest concerns and needs, and compliance kept coming up. They realized they really needed a national solution for compliance and they couldn't go on with letting agencies figure it out themselves. We have some amazing compliance professionals but now we're all a team and we're going to come up with the best ways to handle compliance concerns, whether it's reporting to the various agencies, the Form 5500s, the 1094s, or answering questions and making sure every client has a great plan document in place.
EBA: What's the biggest compliance challenge for today's benefit advisor? Is it the complexity of what's required or brand new regulations coming to the forefront?
Capilla: Right now, it's more of a volume issue. I think 20 years ago, people had a handle on what they needed to do and the government has been just consistently adding more and more requirements but they really haven't taken any away.
We focused for so long on the ACA and getting everyone up and running with the new ACA regulations and then when that slowed down a bit, everyone took a deep breath and realized, wait a second - all of those older ERISA and HIPAA regulations are all still around and we need to make sure that new clients are just as up-to-date on those as everyone is on their ACA requirements.
EBA: Some young benefit brokers entering this space they might not be aware of these regulations.
Capilla: That's true. I am an adjunct law professor and I speak regularly at the dePaul University College of Law and I'm there telling students in the health law program there that the employee benefit space is short on young talent. “If you can spend your time in law school learning these regulations, any brokerage in the United States would be more than thrilled to have you as part of their team.”
EBA: Are there more regulations coming down that brokers and employers should be aware of?
Capilla: Yes. We're hearing rumors that these regulations on association health plans that were made back in January -- we're hearing that that's going to happen.
The other one to be pretty nervous about are those Form 5500 proposed regs that came out over a year ago and nothing has happened. If those go into effect, that would be as groundbreaking as the ACA as far as how much work it will create for smaller employers.
EBA: Can you give us an example?
Capilla: It's more the process in the gathering the data and information necessary for 5500s, so actually filling out the schedules and returning them in a timely manner. We had that smaller player exception for employers with less than 100 participants for so long and small employers have never even learned about 5500s because it just wasn't applicable to them. If these regs go into effect and require every group health plan to file a 5500, that will be a massive amount of time and cost for these smaller employers.
It requires some expertise and somebody to correctly filling these forms out. It's going to be every single employer. That’s huge. That is like taking the 1094 and 1095 reporting and flipping it: Instead of large employers worrying about it, now we're going back and we're saying every single small employer of the US with a group health plan has to worry about this.
EBA: What will small employers have to know?
Capilla: For these small employers, it's going to be really new and they can be really complicated particularly if you have a 401(k) because you have to file a 5500 for every ERISA plan you have. Some of those employers struggle to understand how many Erisa plans do I have? Do I need an accountant? Some plans require a financial audit and an account statement attached to the Schedule 8 and then there's some gray area things with wellness plans and EAPs and whether or not they need to be in a 5500.
So, it's not just hand the instructions to your finance or your human resources department and say, “hey get this done by the end of the week.” There's a real art to filling these forms out and knowing what goes in and what stays out.
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