Compliance News | December 10, 2020

2020 Enforcement Data Can Help Target Compliance Issues

Plan sponsors need to be aware that enforcement of laws applicable to employment-based pension and health plans continues to be a priority for the DOL. Recently released results of the DOL’s 2020 enforcement efforts provide insights into programs through which damages were recovered during the 2020 fiscal year.

This information may help plan sponsors identify areas where they made need to develop or further support their record of compliance. Although the DOL targets private plans, the information is also useful for sponsors of public sector plans because the Department of Health and Human Services takes a parallel approach to enforcement.

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2020 results of the DOL’s enforcement efforts

The DOL’s 2020 Enforcement Fact Sheet reports $3.1 billion in recoveries to plans, participants and beneficiaries. In FY 2020, the DOL’s Employee Benefits Administration (EBSA) closed:

  • 1,122 civil investigations with 754 of those cases (67 percent) resulting in monetary results for plans or other corrective action
  • 230 criminal investigations, leading to the indictment of 70 individuals

In addition, the DOL’s Benefits Advisors closed more than 171,000 inquiries and recovered $456.3 million in benefits on behalf of workers and their families through informal resolution of individual complaints.

Enforcement priorities and approach

While the 2020 Fact Sheet generally provides overall enforcement results, EBSA’s enforcement manual describes the agency’s enforcement priorities. Further, the biennial report 2020 Report to Congress: Parity Partnerships: Working Together describes the agency’s enforcement approach with respect to mental health parity.

Actions for plan sponsors to consider

Undergoing a DOL audit or investigation is a time- and resource- intensive undertaking. It is a good idea to review your plan benefits and administrative practices on a regular basis to help ensure compliance. Such reviews can help your plan be better prepared if it faces a federal investigation.

If you use service providers, consider coordinating with them to ensure they are administering your plan benefits in compliance. Also, consider internal processes for handling complaints. If improperly handled, they can lead to further complaints to the DOL that may trigger a plan investigation.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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