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Government Contractor Compliance Series

SAHOURI
Author
SAHOURI
Published
August 6, 2021

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:

 

The Panel

GovCon 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:
    • Benefits 
    • Compliance & Insurance

 

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 

 

Watch the Webinar: 

 

 

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

 

Watch the Webinar:

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?

Watch the webinar: 

SAHOURI
SAHOURI
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