Category Archives: Employee Health

ERISA Compliance – What Every Employer Needs to Know About Plan Documents

Imagine an agent from the Department of Labor walks in your office and asks for your ERISA documents. For 90% of employers, the answer would be “what is that?”. Yet for every employer, maintaining ERISA documents is essential – and here is why:

ERISA is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers.

ERISA includes requirements for both retirement plans (for example, 401(k) plans) and welfare benefit plans (for example, group health plans). ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries.

The Department of Labor (DOL), through its Employee Benefits Security Administration (EBSA), enforces most of ERISA’s provisions. Violating ERISA can have serious and costly consequences for employers that sponsor welfare benefit plans, either through DOL enforcement actions and penalty assessments or through participant lawsuits.

All welfare plans are subject to ERISA (medical, dental, vision, life, disability, certain employee assistance and wellness programs, for example) and are required to have a plan document that is memorialized in writing. ERISA further required that the plan document contain specific, express provisions. This means if you deliver any type of benefit program to employees, it’s likely you need a current ERISA document.

How does the DOL enforce ERISA?

The DOL has broad authority to investigate or audit an employee benefit plan’s compliance with the ERISA. The DOL’s EBSA division handles audits of employee benefit plans. To perform these audits, EBSA employs over 400 investigators working out of field offices, many of whom are lawyers or CPAs or have advanced degrees in business or finance. The DOL has authority to assess civil penalties for many different types of ERISA violations.

How can an employer minimize its risk of being audited by the DOL?

As a practical matter, an employer has little control over whether it will be audited by the DOL. However, an employer can take the following steps to help minimize its exposure to a DOL audit:

  • Respond to participants’ benefit questions and requests for information on a timely basis;
  • File Form 5500 on time and make sure it is complete and accurate;
  • Create and distribute participant notices required by law (for example, the summary of benefits and coverage) by the deadline; and
  • Make timely updates to plan documents and summary plan descriptions (SPDs) to reflect legal and design changes.

How can employers be prepared for a DOL audit?

The best way to prepare for a DOL audit is to remain in compliance with the law and establish a recordkeeping system for maintaining all of the important documents relating to your employee benefit plans. Retaining complete and accurate records will help move along the audit process and provide an accurate picture of an employer’s benefit package. As a general rule, these records should be retained for seven years.

Because the DOL has increased the frequency of health plan audits, employers should consider reviewing their health plans for compliance now, before they are selected for audit. It is important for employers to get their health plans’ paperwork in order as part of this process. Don’t be fooled into thinking you are “too small” for ERISA. Employers of every size who provide any type of Employer Sponsored Benefit Plan are subject to ERISA. Ask your broker if you need documents and get them done!

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Lief Organics Leaf Labs

Lief Organics, is a Valencia-based wholesaler of raw nutrients and ingredients for the natural foods and supplement industry. The company just relocated their manufacturing and distributing to new facilities, with a staff of over 100 and a robust sales team growing to $30 million in sales, Lief needed more space.


Lief Organics has experienced amazing growth by creating an environment that attracts high-level talent, an energetic and amazing workspace, and by delivering high-touch employee benefits through CorpStrat. 

Adel Villalobos, The President and CEO was born with a knack for 2 things; science and baseball. He would eventually use baseball as his motivation to attend California State University Northridge, to obtain his degree in Biochemistry and Nutrition. Once enrolled, Adel further realized his passion for science and decided to focus less on his baseball mitt and more on garnering any experience he can get in what was then a relatively new and burgeoning Nutraceutical Industry.

He eventually landed a part-time job as a Customer Service Rep with a company called Natrol. It was at Natrol, where the seed of eventually starting his own company was planted. Adel, was eager to learn and was willing to try his hand in various departments at Natrol, from Customer Service to QC Lab Tech to Marketing, Product Development and even Legal. After moving around all the departments at Natrol, Adel knew what his next step needed to be, and that was to try to make it on his own as a leader in an industry that he has grown to love. In 2008, Adel would eventually go on to start Lief. At the time, equipped with only big dreams and humble beginnings, have now grown into a 140,000 sq. ft. Contract Manufacturing Facility in Valencia California, just 20 minutes north from his home that he shares with his wife and 2 children.

I love being a part of the professional and personal growth that happens when you are in the Health Sector.  Our industry attracts great people.  Whether it is our staff or our clients. And I am committed to building great relationships and spreading quality supplements worldwide.

 
Lief’s VP, Victor Leyson, has been working with CorpStrat for nearly 11 years, Lief’s employees receive employee benefits, payroll, and communicate with their employer through CorpStratHR robust Human Resource Management System The HR platform that delivers a “hire through fire” cloud-based way for companies to manage their people and their employment lifespan. “CorpStrat has been a key advisor and catalyst for our growth and unusual amazing advocate for our company” says Leyson. “I value CorpStrat as my one stop shop for guidance and honest /sound advice on all our benefits and Insurance needs from a more global level.

 

Please contact us for more information or questions regarding your HR needs.

We May Not Own The Building, But Our Name Is On Top!

The “CorpStrat” headquarters is located near Desoto and the 101 freeway.

 

 

 

 

 

 

 

 

How We Celebrate

CorpStrat celebrates its 25th year in business this year, and what better way to showcase our success than with our logo atop our new headquarters. In January, we moved to Woodland Hills CA, and we officially emblazoned our new offices this past month.

CorpStrat has been named one of the Top Insurance Brokers 2017 by both the San Fernando Valley, and Los Angeles Business Journals. The firm is a member of Anthem’s ACE team, Blue Shields’ President Council, and the firm’s principals maintain Life and Qualifying Member status of The Million Dollar Round Table, an elite group of professionals representing the top 1% of successful insurance and financial service advisors in the USA.

We are proud of our growth, our success and future. Our staff stands ready to help companies and professionals with Employee Benefits, Payroll, HR Technology, HR Compliance, and Business insurance planning.

HR Outsourcing: The Secret Weapon For Today’s Business

More than ever, today’s businesses are running lean and seeking ways to mitigate their risk while increasing efficiency. In a recent survey conducted by SHRM, they identified the most common reasons why companies choose to outsource their HR:

  • Save Money – 26%
  • Focus on Business – 23%
  • Improve Compliance – 30%
  • Lack of In-house Expertise – 20%

Human resources is more than hiring and firing. Much more. With new laws being passed more and more often, compliance, concrete HR systems, and training are key components businesses of every size need. Noncompliance and lack of systems cost businesses 10’s of thousands of dollars every day.

Options For Managing HR

Employers often try to manage HR themselves with little to no expertise. This often leads business owners working in their business versus on their business. To minimize the challenges posed by HR management, many businesses are turning to CorpStrat HR.

Benefits our clients love:

  • Support in navigating complex legal issues.
  • Cost effective solutions.
  • Effective management of performance issues.
  • Reduced pressure on internal HR staff.
  • Updated practices and policies.
  • Increased productivity.
  • Risk Management.

If you haven’t given serious thought to HR outsourcing, the range of support you can have just might surprise you. Contact CorpStrat today to free up your time so you can focus on your business.

 

CVS to Buy Aetna for $69 Billion in a Deal That May Reshape the Health Industry

December 5, 2017
 

Source: The New York Times

CVS Health said on Sunday that it had agreed to buy Aetna for about $69 billion in a deal that would combine the drugstore giant with one of the biggest health insurers in the United States and has the potential to reshape the nation’s health care industry.

The transaction, one of the largest of the year, reflects the increasingly blurred lines between the traditionally separate spheres of a rapidly changing industry. It represents an effort to make both companies more appealing to consumers as health care that was once delivered in a doctor’s office more often reaches consumers over the phone, at a retail clinic or via an app.

The merger comes at a time of turbulent transformation in health care. Insurers, hospitals and pharmacy companies are bracing for a possible disruption in government programs like Medicare as a result of the Republicans’ plan to cut taxes. Congress remains at an impasse over the future of the Affordable Care Act, while employers and consumers are struggling under the weight of rising medical costs, including the soaring price of prescription drugs. And rapid changes in technology have raised the specter of new competitors — most notably Amazon.

A combined CVS-Aetna could position itself as a formidable figure in this changing landscape. Together, the companies touch most of the basic health services that people regularly use, providing an opportunity to benefit consumers. CVS operates a chain of pharmacies and retail clinics that could be used by Aetna to provide care directly to patients, while the merged company could be better able to offer employers one-stop shopping for health insurance for their workers.

But critics worry that customers could also find their choices sharply limited. The deal risks leaving patients with less choice of where to get care or fill a prescription if those with Aetna insurance are forced to go to CVS for much of their care.

On Sunday, the two companies emphasized their ability to transform CVS’s 10,000 pharmacy and clinic locations into community-based sites of care that would be far less expensive for patients.

“We think of it as creating a new front door to health care in America,” CVS Health’s chief executive, Larry J. Merlo, said in an interview.

The merger would establish a new way of delivering care, with nurses, pharmacists and others available to counsel people about their diabetes or do the lab work necessary to diagnose a condition, Mr. Merlo said. “We know we can make health care more affordable and less expensive.”

Mark T. Bertolini, Aetna’s chief executive, said that by using CVS’s locations, the company can provide people with a better way of accessing medical care.

“It’s in their community. It’s in their home,” he said. He added, “CVS has the draw. People trust their pharmacist.”

It is the development of community-based clinics — capable of delivering care with the technology and health information available from both parties — that could prove to be the biggest change brought about the deal.

The hope would be that consumers would not only be able to see savings by going to a retail store to treat a sore throat but also have better oversight of a chronic illness, such as diabetes or heart disease. They could get advice on how to lose weight, or undergo tests to monitor their health.

“If they can drive the adoption of the care delivery model, that’s a big deal,” said Ana Gupte, a senior health care analyst for Leerink Partners.

The merger agreement came as another factor weighs on the minds of all in the health care industry: Amazon, which has been rumored to be preparingfor an entry into the pharmacy business. Jeff Bezos, the Amazon chief executive, and his e-commerce juggernaut have already overturned many industries: book buying, retail shopping, groceries and Hollywood, using fierce customer loyalty and enormous reach as cudgels against incumbent players.

But CVS and Aetna have had a business partnership dating back seven years, and have steadily converged into similar visions of how the health care industry was evolving. Conversations about a deeper bond eventually crystallized into deal talks within the last two months, according to a person with direct knowledge of the discussions.

Although neither chief executive mentioned Amazon by name, both said that what they were creating was a compelling opportunity in and of itself.

“Chasing our competitors has never been a solution,” Mr. Bertolini said. He added, “Our competitors will do what they do.”

Many companies are seeking shelter in the arms of their former adversaries, with well-known medical groups like the Cleveland Clinic joining with Oscar Health, an insurer. With federal officials blocking traditional mergers — like the megadeal that featured Anthem and Cigna, the nation’s largest insurers, and one involving Aetna and its rival Humana — companies are looking at combinations that take them beyond their traditional lines of business.

Many analysts view the combination of CVS and Aetna as a defensive move by the companies. CVS Health, which also recently signed an agreement with Anthem to help the insurer start its own internal pharmacy benefit manager, is looking to protect its business with Aetna as it fends off rivals like UnitedHealth Group’s OptumRx and others. Aetna, foiled in its attempt to buy Humana, is searching for new ways to expand its business.

The merger could also fundamentally reshape the business of overseeing drug coverage for insurers, an industry that is dominated by three large players and that has increasingly come under scrutiny over the past year as public anger over high drug prices has expanded beyond the usual culprits — most notably the pharmaceutical industry — to lesser-known players like pharmacy benefit managers.

Under the terms of the deal, CVS will pay about $207 a share, based on Friday’s closing prices. Roughly $145 a share of that would be in cash, with the remainder in newly issued CVS stock. The deal is expected to close in the second half of next year, subject to approval by shareholders of both companies as well as regulators.

Antitrust approval has become an interesting question in the Trump administration, which bankers and lawyers had thought would be more tolerant of consolidation than its predecessor.

A combination of a drugstore company and an insurer is considered less problematic than a merger of two players in the same business, which could reduce competition and hurt consumers. Such concerns ultimately sank Aetna’s efforts to buy Humana, and Anthem’s push to buy Cigna, when the Obama administration signaled its opposition to such consolidation.

CVS’s proposed takeover of Aetna is a so-called vertical merger, combining companies in two different industries. But while such deals have traditionally met little opposition in Washington, the Justice Department has sued to block AT&T’s $85.4 billion takeover of Time Warner on the grounds that it would create too powerful of a content company.

Both CVS and Aetna played down the prospects of regulators moving to block their deal. The breakup fee for the transaction is not especially large, reflecting that belief.

Mr. Bertolini asserted that the companies would not raise prices for consumers. “It doesn’t make sense for us to charge people more when we want more people in the store,” he said.

But analysts and other merger experts warn that the deal could be blocked by federal antitrust officials who worry that it could lessen competition. One area of focus may be Medicare; both companies are significant players in offering prescription drug plans to Medicare beneficiaries.

While the companies said they want to lower costs, CVS also makes money on rebates from drug makers and on filling prescriptions through its pharmacies.

David A. Balto, an antitrust lawyer who has been sharply critical of combinations among insurers and pharmacy benefit managers, said that he was wary of having retailers in charge of people’s health. He argued that doctors may be in a better position to treat illness than retail executives.

“Who do you want to run the health care system?” he said.

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