Businesses with calendar-year benefits plans typically run their open-enrollment period in the fall, allowing employees to make changes to their retirement, life insurance, disability coverage, and health insurance, as well as other employee benefit products.
Now is a great time to review with staff the importance of doing all paperwork exactly right and to talk to your insurance agent or broker about important insurance for your benefits plans and personnel.
ERISA (the Employee Retirement Income Security Act of 1974) sets forth guidelines for employer protection of employees’ benefits. In fact, businesses have several insurance considerations regarding the administration of employee benefits plans—for example, a required ERISA bond, employee benefits liability insurance, and fiduciary liability coverage.
The ERISA bond protects the plan funds. The amount required of the bond is often equal to 10% of plan assets.
Employee benefits liability insurance may be purchased separately or may be included in the business’s general liability insurance policy. It is designed to cover your business for allegations of financial damage stemming from administrative errors, such as failing to enroll an employee in the company’s health insurance plan.
Fiduciary liability protects the people who handle monetary transactions within your organization. Even if you, the employer, direct your employees to an outside financial advisor who controls the 401(k) plan, you may still be named in a fiduciary liability claim (since you directed employees to that advisor).
Quality, comprehensive coverage can protect your business from legal bills resulting from allegations arising from poor retirement fund performance, benefit-enrollment errors, and fiduciary failures.
