GNYADA Insurance Brokerage Brief - Summer 2017

BROKERAGE BRIEF I N S U R A N C E Is Your Dealership at Risk for an ERISA Violation? Under the Employee Retirement Income Security Act (ERISA), all private sector employers, including dealers, must automatically provide an ERISA Summary Plan Description (SPD) to all participants in the company health plan. It is important to note that while insurance carriers must provide covered employees with what are known as Evidence of Coverage (EOC) certificates, these certificates alone do note meet the ERISA disclosure requirement; only the SPD, provided to employees by their employer, satisfies this. Dealers must provide an SPD to any employee to whom they provide one of the following benefits: • Health, Dental and/or Vision Insurance • Health Flexible Spending Accounts • Accidental Death & Dismemberment Insurance • Group Term Life Insurance • Short Term and Long Term Disability • Severance Policies • Wellness and Employee Assistance Programs If your dealership does not provide SPDs for these products, you are in violation of ERISA and exposed to noncompliance fines. In the past, this has been something the federal government enforced lightly, if at all; however, dealers should be advised that it is now being viewed as a revenue generator.

Prepare for New York’s Paid Family Leave Law New York’s Paid Family Leave Benefits Law (PFLBL) — entitling employees to 12 weeks of paid family leave for certain qualifying reasons — is set to go into effect on January 1, 2018. The policy itself will be funded by employee payroll deductions, and employers will be able to begin taking these deductions on July 1, 2017. (The state will announce the maximum employee contribution rate at that time.) Once payroll deductions are made, dealers will have the option of paying the premium to either a State PFLBL insurance plan or to their DBL insurance carrier. The GNYADA Insurance Brokerage can answer questions about how to make these new Paid Family Leave benefits available to your employees. To discuss your options, call the Brokerage at 718.746.8100.

In egregious cases, ERISA has the power to bring civil actions against violators. Additionally, individual employees can themselves bring action against their employer and be entitled to $147 per day for every day they do not receive these ERISA SPD’s. (Employers offering benefits to 100+ employees must also file Form 5500 [Annual Return/Report of Employee Benefit Plan] with the IRS. This form reports the company’s financial condition, investments and operations.)

If you would like help ensuring that the proper information is being provided to your employees, the GNYADA Insurance Brokerage can connect you with a third- party administrator that has experience with dealerships. These administrators help dealers avoid potential severe federal penalties associated with ERISA noncompliance. Eric Meyerhoff, Regional Sales Director for AMERIFLEX, a third party administrator, contributed to this article.

Michael W. Conway , Executive Director of the GNYADA Insurance Brokerage, is available to discuss your current and future insurance needs. To discuss any of the topics contained in this newsletter, schedule an in-person visit at your dealership, or inquire about insurance issues, Michael can be reached at 718.746.8100 or mconway@gnyada.com .

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SUMMER 2017