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| Posted on: Monday, August 27, 2007 |
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The Employee Benefits Security Administration (EBSA) of the Department of Labor recently announced that they will be launching an audit focusing on plan sponsors’ compliance with HIPAA’s disclosure and reporting obligations. The initiative will run through the end of March 2008 and will selectively target plan sponsors around the nation. EBSA will identify employers who may have received ERISA section 502 complaints and/or negative press in newspapers, industry journals or other local knowledgeable sources. Information from the IRS, the SEC, and state insurance agencies may also be used to target employee benefit plans.
If your plan is chosen to participate in the audit you will receive a phone call or an Audit Notice Letter. If selected, you and your assigned auditor will need to schedule a time for the on-site review, which will generally take no longer than three days. Your employer should also designate either an upper-level employee or a member of their legal counsel to act as a liaison who will be the primary contact of the auditor and who will represent the plan during the investigation.
Once the meeting is set you will receive a confirmation letter along with a detailed list of materials that will need to be made available to the auditor. It is your obligation to gather and review these records and ensure that the plan has been administered in accordance with the regulations. We would also suggest you notify all service providers to the plan as soon as you have been informed of the audit.
There are fifteen items that the audit will specifically focus on regarding the healthcare reporting and disclosure aspects of HIPAA. The audit will concentrate on both the plan’s compliance with HIPAA’s Privacy Rule, as well as your plan’s Summary Plan Description (SPD) forms that must accurately document the necessary notifications and disclosures. Your HIPAA Business Associate Agreements will also likely be reviewed.
In order to prepare for the audit, it is strongly recommended that the plan sponsor review the DOL website, paying particular attention to the ERISA fiduciary obligations at 45 CFR 164.504(f)(2)(i)(A) through (J).
After the review of the documents and protocols the auditor may conduct a short exit interview with the liaison and any other applicable parties. During this meeting the employer’s representatives should ask any remaining questions and discuss any issues that may be of concern to them. It is acceptable to ask the auditor for his/her opinion of the plan’s ERISA compliance as well as whether any potential violations appear to exist.
Upon the completion of the audit the Department of Labor may issue a notice of its investigative findings and requested compliance in one of the four formats:
1. No Violation Pattern Closing Letter
2. Cautionary Letter – No Action Warranted; Compliance Achieved
3. Voluntary Compliance Notice Letter
4. Demand or Litigation Notice
For more information on the Department of Labor’s HIPAA audit initiative we encourage you to visit the DOL website.
Should you have any additional employee benefit questions or would like to discuss this material in detail, please don’t hesitate to call the Denman Team.
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