Employee Benefits Checklist

The benefits broker pulls renewal proposals from each appointed carrier and lays them next to the in-force plan: premium change, network disruption (BCBS vs UHC vs Aetna), formulary changes, and embedded vs aggregate deductible. Note any large-claim laser or rate cap that the renewal underwriter applied.

For 2025 plan years the affordability threshold is 9.02% of household income, generally measured via the W-2, rate-of-pay, or federal poverty line safe harbor. Confirm the lowest-cost self-only plan still passes for the lowest-paid full-time employee. Determine whether the employer is an Applicable Large Employer (50+ FTE).

Pre-tax payroll deduction for medical, dental, vision, and FSA contributions requires a written Section 125 plan document signed before the plan year begins. Refresh contribution limits (FSA $3,300 / DCAP $5,000 for 2025) and confirm any new mid-year election change events.

Summary of Benefits and Coverage must reach enrollees at least 30 days before the plan year, in the standardized DOL template. Electronic delivery requires either workplace-computer access or affirmative consent. Late or missing SBCs carry a $1,406 per-failure penalty (2025 indexed amount).

ALEs file 1094-C transmittal and 1095-C employee statements via the IRS AIR system. Employee copies due by March 3; IRS filing by March 31 if filing electronically. Watch the offer-of-coverage codes on Line 14 — code 1A (qualifying offer) is the most common audit target.

Sit with the plan advisor and review fund performance against benchmarks, expense ratios, and any watch-list funds from the prior committee meeting. Document the prudent process — fee-litigation defendants lose on process documentation, not on fund choice.

Identify who holds 3(16) plan administrator, 3(21) co-fiduciary advisory, and 3(38) discretionary investment manager roles. Confirm fiduciary insurance and ERISA bond (10% of plan assets, $500K cap or $1M for plans holding employer securities) are in force.

Test HCE (Highly Compensated Employee) deferrals against NHCE deferrals for both elective deferrals (ADP) and matching contributions (ACP). Failed tests require corrective distributions within 2.5 months of plan year-end to avoid the 10% excise tax. Safe harbor plans skip ADP/ACP but still test top-heavy.

Annual participant fee disclosure under ERISA 404(a)(5) is due at least once every 14 months. The QDIA notice goes to participants auto-enrolled into the default fund 30 days before each plan year. Combine with the safe-harbor and auto-enrollment notices to a single annual packet to avoid distribution gaps.

Form 5500 is due seven months after plan year-end (July 31 for calendar plans), with a 2½-month extension via Form 5558. Plans with 100+ participants attach an independent auditor's report (Schedule H). Late filings escape DOL penalties through the DFVC program at $750-$2,000 per filing.

Confirm the vendor signs a Business Associate Agreement, has SOC 2 Type II coverage for PHI handling, and segregates wellness data from the employer-facing portal. Common gotcha: vendor sends individualized biometric results to HR rather than aggregate-only reports.

Participatory programs (gym reimbursement, attendance at a seminar) carry no HIPAA reward limits. Health-contingent programs — activity-only or outcome-based — cap rewards at 30% of total cost of coverage (50% for tobacco-cessation) and require additional standards under the HIPAA wellness rules.

Health-contingent programs must offer a reasonable alternative standard (RAS) to anyone for whom the original standard is medically inadvisable or unreasonably difficult. The plan must disclose RAS availability in all program materials — boilerplate language from the DOL Field Assistance Bulletin satisfies the disclosure rule.

Coordinate vendor scheduling with payroll periods so participation incentives flow correctly. Provide the ADA/GINA-compliant authorization form to participants before the screening — voluntary participation language and information-use disclosures are required.

Industry benchmark for participatory programs is 40-60% in year one; outcome-based runs 25-40%. If participation tracks below benchmark, re-examine the incentive design before changing vendors.

Federal FMLA gives 12 weeks unpaid for covered employees at 50+ employee worksites. Stack against state paid family leave (CA PFL, NY PFL, NJ FLI, MA PFML, WA PFML, CO FAMLI, OR Paid Leave) and any state pregnancy disability leave. Concurrent vs sequential running is the most common policy error.

Refresh the handbook to reflect new state PFL contribution rates, military exigency leave, jury duty rules, and any new sick leave entitlements (CA SB 616 = 5 days/40 hours, IL paid leave for any reason, MN ESST). Have employment counsel review state-specific carve-outs before publishing.

Managers should not ask diagnosis questions or request medical records directly. The standard rule: route every leave inquiry to HR or the third-party administrator (Lincoln, Unum, MetLife, Sedgwick) within 5 business days of receiving notice — that triggers the FMLA Eligibility and Rights & Responsibilities Notice clock.

Intermittent FMLA is the single biggest source of leave-administration errors. The smallest increment used for other forms of leave (often 15 minutes) is what FMLA must allow. Confirm Workday, BambooHR, UKG, or ADP is configured to deduct intermittent hours from the 480-hour bank correctly.

CA, CO, MT, NE, ND, and others require payout of accrued vacation at separation; some states bar use-it-or-lose-it. Confirm the policy and the HRIS accrual cap match — runaway PTO balances at separation are a frequent source of wage-claim findings.

Request the de-identified utilization report from the EAP vendor — counseling sessions used, top presenting issues (anxiety, financial stress, substance use), critical incident response calls, and manager consultations. Industry-average utilization is 5-8%; under 3% suggests an awareness or access problem rather than a vendor problem.

Mental Health Parity and Addiction Equity Act now requires plans to perform and document a Non-Quantitative Treatment Limitations (NQTL) comparative analysis. Confirm the EAP vendor or carrier has produced the NQTL analysis for the current plan year — DOL audits ask for it on request, and 2024 final rules tightened the documentation standard.

Decision factors: utilization trend, member satisfaction scores, network adequacy (counselor wait times under 5 business days), and per-employee-per-month rate against benchmarks (typical $1.50-$4.00 PEPM for a stand-alone EAP).

Lock the renewal rate, confirm any session-count changes (3, 5, 8 sessions per issue per year are typical bands), and update the Summary Plan Description if the offering shifted. Send the executed renewal to broker compliance for the file.

Solicit at least three proposals — common alternates include ComPsych, Spring Health, Lyra, Modern Health, and Magellan. Score on network size, digital intake experience, MHPAEA documentation maturity, and reporting cadence. Allow 60 days from RFP to vendor selection so implementation lands before plan year start.

Wallet cards, payroll-stuffer flyers, and an intranet page with the EAP toll-free number drive utilization more than email blasts. Re-distribute after any leadership change or workforce reduction — those are the moments employees actually try to use the benefit.