Do your clients have a process in place to comply with the laws that regulate their health plans? If the answer is no, then by default your compliance strategy recommendation to them is “keep your head down and hope you don’t get caught.”
While this approach may actually be appealing to some overworked HR Managers, others in the organization, such as the CFO or CEO, may not be happy if they discover that federal law is being ignored. These executives are typically well versed in fiduciary liability and realize that this strategy can hurt the company in many, often unforeseen ways (not to mention Labor Department audits). This puts your client’s company, your client’s job and of course your relationship with your client at risk.
For example, the due diligence that occurs with the sale, purchase or merger of a business or business unit often scrutinizes the benefit plans of each party. Potential exposure to fines and lawsuits arising out of noncompliance will be noted and could become an issue during the business transaction.
Many benefit lawsuits arise out of a claim denial, and it is surprising how often this involves a compliance deficiency, whether it is information not being properly disclosed or documentation not being in place. In addition, any plan participant can bring suit to enforce the provisions of ERISA or HIPAA. If an employee sues the company because it is not complying with the law, the company loses – no matter how trivial the breach or even the actual outcome of the suit. The bad publicity is the only thing the employees and the public will remember. Imagine the frustration of a CEO who knows all too well the money the company spends to provide health insurance to its employees, only to see this wonderful benefit turn into a public relations black eye.
What will be even more frustrating is when he or she learns that compliance is really not that difficult. Primarily, a company needs to have a well-organized compliance process in place. And, if the HR department doesn’t have the time to create this process, there are tools available that can do most of the work.
Remember, ignorance of the law is no defense. Are you serving your clients if you recommend a health plan, and then don’t fully inform them of the legal obligations that go along with it? Think of the value you can add by taking the next step and actually helping them with the compliance process or finding the tools that will put a compliance process in place. It may be the differentiator they are looking for in an adviser.
What do you think? Does compliance really matter? Share your thoughts in the comments.
Bond brings 20 years of experience in the health care arena to Compliancedashboard LLC. He helped create the web based compliance solution – and it has helped over thousands of employers manage their ERISA compliance obligations and taking the worry out of health care reform. He can be reached at (877) 328.7880 x147 or firstname.lastname@example.org.
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