One missed compliance notice cost a New Jersey employer more than $94,500.

Employee benefits compliance isn’t just a paperwork exercise. For employers, mistakes involving ACA reporting, ERISA documentation, and COBRA notices can lead to significant penalties, audits, and unnecessary legal exposure.

In this video, Kathryn Reed, SHRM-CP, Senior Director of HR at JS Benefits Group, discusses three of the most common compliance mistakes employers make and what organizations can do to avoid them.

Watch the video below:

The 3 Compliance Mistakes That Cost Employers

 

Deadline For Reporting ACA

Mistake #1: ACA Reporting Errors

Many employers assume Affordable Care Act (ACA) penalties only occur when employees are not offered health insurance. In reality, a large percentage of ACA penalties stem from reporting and documentation errors.

Common ACA mistakes include:

  • Incorrect Forms 1094-C and 1095-C
  • Missing filing deadlines
  • Employee coding errors
  • Inaccurate eligibility tracking

Even employers offering compliant health coverage can face penalties if reporting requirements are not handled properly.

Regular audits of employee eligibility and ACA reporting processes can help reduce risk.

Mistake #2: Missing ERISA Plan Documents

One of the most misunderstood compliance requirements involves ERISA plan documentation.

Many employers believe the insurance carrier’s certificate of coverage satisfies ERISA requirements. In most cases, it does not.

Employers should have:

  • A Summary Plan Description (SPD)
  • Plan Document
  • Required employee disclosures
  • Updated compliance notices

Failure to maintain proper ERISA documentation can create significant exposure during a Department of Labor audit.

A compliance review can help determine whether your current documentation meets federal requirements.

Employee Handbook 

Mistake #3: COBRA Notice Failures

COBRA compliance remains one of the most common areas where employers make costly mistakes.

The two notices most frequently missed are:

Initial COBRA Notice

Employees and covered dependents must receive an initial COBRA notice explaining their rights shortly after coverage begins.

Qualifying Event Notice

When an employee experiences a qualifying event, such as termination or a reduction in hours, COBRA election notices must be provided within specific timeframes.

Missing these notices can expose employers to penalties, legal costs, and participant complaints.

Don’t Forget About Form 5500 Filing Requirements

Employers sponsoring certain benefit plans may also be required to file Form 5500 annually.

Missed filings can create substantial penalties. Fortunately, voluntary correction programs may be available before regulators discover the issue.

Employers should periodically review filing obligations to ensure ongoing compliance.

Why Compliance Reviews Matter

Employee benefits compliance continues to evolve, and many employers don’t discover issues until they receive an audit request, employee complaint, or penalty notice.

A proactive compliance review can identify potential concerns before they become expensive problems.

At JS Benefits Group, we help employers across Pennsylvania, New Jersey, Delaware, Maryland, New York, and nationwide evaluate their employee benefits programs, compliance requirements, and risk exposure.

Schedule a Free Compliance Review

If you’d like a second opinion on your current compliance practices, schedule a complimentary 30-minute compliance review with the team at JS Benefits Group.

📞 877–355–6070

Learn more about employee benefits compliance, ACA reporting, ERISA requirements, COBRA administration, and HR best practices by exploring additional resources on our website.