Insurance and legal experts from Sahouri Insurance and General Counsel P.C. hosted a three-part series that examined the compliance hurdles that government contractors face. Our experts investigated key compliance issues, shared best practices, and answered pertinent questions.
What you will learn:
- Meet the Panel
- Corporate & Contract Compliance
- Prime & Sub Relationships: Shifting Costs and Liability
- Claims, Complaints, & Investigations
The Panel
Part 1: Corporate & Contract Compliance
Governance Compliance
- State registrations
- Annual report, etc. – standard Corporate Governance and how it applies to Contractors
Broad Benefits Compliance: Guiding compliance questions for employers
- What regulations apply to my business?
- Are we at risk for an audit and/or penalties?
- What steps should I take to be compliant?
- Who can help?
Scenario #1: New Contract = Rapid Growth
- Government Contract Requirements
- Ethics Programs
- Employment Regulations
- Compliance & Insurance:
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Benefits
- Compliance & Insurance
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Broad Benefits Compliance: Central Components for Corporate Benefits Compliance
What is ERISA: The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. The Department of Labor, IRS, and HHS enforce regulations and can charge companies with fines and penalties for non-compliance.
Applicable regulations:
COBRA/State Continuation: extends coverage rights for group health plans after termination – applies to all companies with a group health plan
HIPAA: privacy protection and data security laws – applies to companies with 1 or more employees
NDT (Non-Discrimination Testing): ensures that highly compensated employees are not receiving greater benefits than non-highly compensated employees - this applies to most companies with an FSA, Dependent Care plans, HSA’s, and section 125 cafeteria plans.
Wrap/SPD (Summary Plan Description): document outlining participants rights, benefits, and responsibilities regarding group plan offerings – applies to companies with 1 or more employees
5500’s: reporting and disclosure to the IRS – 100 or more participating on any one benefit plan
Required Notices: there are several notices that need to be distributed to benefit-eligible employees – all employers are subject
ACA Reporting (Affordable Care Act): Shared responsibility reporting and Minimal Essential Coverage (Pay or Play) to the IRS – applies to companies with 50 or more full-time equivalent employees
PCORI (Patient Centered Outcomes Research Institute): funding to improve healthcare delivery – applies to any business with a self-funded plan (includes HRA’s and level-funded medical plans)
For each of these requirements, there are specific deadlines for reporting and disclosure responsibilities that if not addressed can be subject to heavy fines by the governing agency.
Scenario #2: New Contract in a New State
Compliance issues
- Licenses and Registrations
- New Employment Regulations
- Tax Issues
Insurance Issues
- Unemployment Insurance
- Is the Worker's Comp policy still valid?
- New laws and regulations
Scenario #3: Remote Workers Move Out of State
Compliance Issues- Are you working out of state?
- Can you adjust salary?
- New Employment Regulations
- Any tax issues
Insurance Issues
- Unemployment Insurance
- Workers' Comp
- New laws and regulations
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Part 2 - Prime & Sub Relationships: Shifting Cost & Liability
Far Flow Downs- Insurance Requirements
- Performance and Admin Requirements
Insurance Requirements: Domestic & International Contracts
Domestic
- Employment Practices Liability, ERISA, Fiduciary Liability & Fidelity/Crime Coverage
- Bonding issues/needs for construction or development contractors
International
- Defense Base Act
- Accidental Death & Dismemberment
- Foreign Repatriation
- Foreign Liability (GB requires $15M liability, Saudi & Iraq require locally placed nationalized coverage.
Prime & Sub-Contractors:Insurance Relationships
Insurance Responsibility
- Pass-through costs
- Compliance
- Prime/sub bond agreements
- OCIP/CCIP’s intro
Risk Transfer Treneds
- Risk transfer trends from prime to sub, as well as from sub to prime
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Part 3: Claims, Complaints & Investigations
Insurance Coverage
- Duty to defend vs. reimbursement
- Defense costs within vs. outside of limits insurance
- Hammer clause
Being Prepared
- Employee handbook
- Ethics and compliance policy
- Investigations policy
Triggers for Investigations
- Hotline reports
- HR complaints
- Emails
- Office interactions
Investigation - Preliminary Issues
- Who investigates?
- Attorney vs. non-attorney
- In house or outside counsel
- Who is involved?
- Identify the scope of the investigation
- Remember: no retaliation!
Insurance Reporting
- What coverage could apply?
- When do I report the claim?
Investigation - Process
- Interviews
- - Who is involved?
- - Fact-finding
- Ethics complaint vs. employment complaint
Investigation - Conclusion
- Final report
- Who gets notified?
- Do I have to withdraw a claim notice?
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