Presenting a live 90-minute webinar with interactive Q&A DOL Audits of Employer Health Plans: Preparing for Increased ACA and Mental Health Parity Act Audits Responding to Audit Letters, Navigating DOL Investigations, Avoiding HHS and IRS Scrutiny THURSDAY, NOVEMBER 19, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Lisa A. Christensen, Senior Counsel, Bond Schoeneck & King , Syracuse, N.Y . Ryan C. Temme, Attorney, Groom Law Group , Washington, D.C. Gary A. Thayer, Of Counsel, Archer Byington Glennon & Levine , Melville, N.Y . The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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OVERVIEW OF DOL (EBSA) AUDIT PROCEDURES and Affordable Care Act Compliance GARY A . THAYER, ESQ. ARCHER BYINGTON GLENNON & LEVINE, LLP 1 HUNTINGTON QUADRANGLE, SUITE 4C10 MELVILLE, NY 11747 11747 GTHAYER@ABGLLAW.COM
Overview of DOL (EBSA) Audit Procedures Health Benefits Security Project (HBSP) Established in FY 2012, the HBSP is EBSA’s comprehensive national health enforcement project. In pertinent part, HBSP examines compliance with Part 7 of ERISA and ACA, investigations of insurance companies and claim administrators to ensure that promised benefits are actually provided, and criminal investigations of fraudulent medical providers. 6
AUDIT PROCEDURES Statutory Authority granted under ERISA section 504, governing the right to inspect private sector retirement and welfare plans. Look to the Opening Letter for guidance on why you are being audited: • Program 53 • Program 48 • Program 52 • Program 50 7
Sources for Potential Health Plan Audits • Information from detailed review of annual report forms 5500, supporting financial statements, schedules, etc. • Information concerning employee health benefit plans or service providers from other governmental agencies such as HHS and state insurance agencies • Media Driven: Newspapers, industry journals and magazines, or leads from knowledgeable parties such as patient advocacy groups, or private litigation • Participant complaints 8
Types of Health Plan Audits Plan Level Audits • In addition to part 6 and 7 of ERISA and ACA, cases will also examine compliance with other ERISA provisions such as claims administration, failure to provide promised benefits at the plan level, reasonable administrative fees, and potential prohibited transactions. Service Provider Investigations • Determining whether service provider exercises discretion or control over benefit claims decisions. These audits focus on procedural, substantive and disclosure violations related to the denial of promised health benefits. 9
DOL Audit Process Opening Letter (document request) or subpoena On-site/off-site document review Interviews of key personnel Voluntary compliance (VC) letter – 10 day letter Refer for litigation or continue to keep case open, investigate related plans of the same sponsor 10
Key Actions and Issues Before, During and After an Audit What to do after receiving the “opening letter” but before the audit begins – • Ensure the lawyer and accountant are notified; • Determine what is being audited – it’s the professional’s job to assess; • Review insurance policies and contact your insurance provider (fiduciary insurance carrier); • Self-audit documents based on the opening letter; • Consider Atty-Client Privilege • Establish a contact person/team to work with DOL. Generally, the attorney should be the contact person. DOL expects this. • Request extension of time, if necessary. 11
Before the audit begins… Prepare to Leave a Good First Impression Document Production and Audit Management: • Orderly and professional presentation in the order requested; • Provide the information in the manner requested, copies, electronic, etc.; • Keep track of all documents initially provided; • Provide copies only on request and with transmittal letter, reviewed by attorney. 12
During the Audit Evaluate the “personality” of the auditor • Subjectivity plays a role in the investigative process. Auditor bias may help you anticipate what the focus of the audit is and where the auditor is headed. • Personality shaped by the management style and background of the regional directors and the head of the regional Office of the Solicitor • Preponderance of lawyers v. accountants Figuring out “personality” • Review local press releases issued by the regional and district offices • Review litigation files by DOL in one’s specific jurisdiction only (U.S. District Court), and • Speak with attorneys and professionals who have dealt with DOL in past 13
During the Audit… • Limit the auditor’s access while on premises • Have your benefits counsel present if possible • Don’t volunteer information • Be comfortable with your own silence • Answer all questions honestly but only the question asked • Cooperate but remember, it is an audit 14
After the Audit… Planning the post audit response • Sometimes a long time without any response from DOL • Discuss with your clients/professionals how to react (i.e., statute of limitations) • Although you are supposed to receive a closing letter or a VC letter, in rare instances you may not receive either • Plan’s response – agree/disagree with EBSA findings; or, do not admit fault but comply with VC letter anyway • Settle/litigate • Regional Solicitor of Labor • DOL/EBSA National Enforcement • Referral to another agency – IRS, Justice Department, etc. 15
Health Plan Audits – Case Opening and Initial Review Any investigation, other than a criminal investigation, involving a group health plan or service provider should be opened as a Program 50 Although the audit may touch on a review of ERISA’s 404 and 406 provisions, the focus will be a compliance review of ERISA parts 6 and 7 relating to the following: • Consolidated Omnibus Budget Reconciliation Act (COBRA) • Health Insurance Portability and Accountability Act (HIPAA) • Mental Health Parity Act (MHPA) • Mental Health Parity and Addiction Equity Act (MHPAEA) • Women’s Health and Cancer Rights Act (WHCRA) • Newborn’s and Mother’s Health Protection Act (Newborn's Act) • Genetic Information Nondiscrimination Act (GINA) • Michelle’s Law • Children’s Health Insurance Program Reauthorization Act (CHIPRA) • Patient Protection and Affordable Care Act (ACA) 16
What is DOL reviewing? Nondiscrimination based on health status; Standards relating to benefits for mothers and newborns; Parity in Mental Health and Substance Use Disorder Benefits; Required coverage for reconstructive surgery following mastectomy; Prohibition on preexisting condition exclusions or other discrimination based on health status; No lifetime or annual limits; Prohibition on rescissions; Coverage of preventive services; 17
What is DOL reviewing? Extension of dependent coverage; Patient protections; Appeals process. 18
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