NYS & DOL Join Forces

Posted on Posted in Alerts, Health and Welfare Compliance

The NYS Attorney General (AG) and US Department of Labor (DOL) working together to uncover violations under ERISA and New York State laws applicable to employer health benefit plans! Here come the audits!!           

This unique agreement increases the regulatory and prosecutorial reach of two already powerful agencies with potentially significant implications for employers, plan fiduciaries, health insurers, third-party health benefit administrators, and their vendors.

While DOL has previously entered into agreements with state attorney general offices to address specific issues implicating both state and federal law, this agreement is unique in that it is open-ended and broadly focused on an entire industry.

The DOL–AG agreement states that the agencies will share “information on a continuing basis regarding particular insurers, fiduciaries, service providers, and other entities and individuals involved with employee benefit plans covered by ERISA, or other applicable federal or state law.” They intend to share information regarding Complaints concerning employee benefit plans, insurers, and related service providers; Violations of ERISA, state law, state or federal regulations and regulatory guidance; and
Claims administration, including claims review procedures and external review

The AG’s press release provides some insight into what may be the subject of initial investigations, stating that, “[b]y teaming up with the U.S. Department of Labor’s Employee Benefits Security Administration, we will make sure that all types of health plans comply with our vital federal and state consumer protection laws, such as the Affordable Care Act’s preventive services provisions and laws requiring equal coverage for mental health and addiction treatment.”

As noted by the AG, the two agencies working together will have access to information, investigative authority, and enforcement tools exceeding that of either agency acting independently. DOL has broad regulatory discretion and a reach that extends to both insured and self-insured employee health benefit plans. The DOL regularly audits health insurers, self-insured employer health benefit plans, employer welfare benefit plans and third-party administrators. If DOL identifies violations, it may impose substantial criminal and civil penalties.

The AG investigates violations of New York State law and similarly has authority to pursue substantial criminal and civil penalties under State law. Unlike DOL, due to federal preemption, the AG cannot independently investigate self-insured employee health benefit plans and most violations of federal law.

Approximately 60 percent of employees with employment-based health insurance coverage are enrolled in self-insured plans. Absent this agreement, the AG would have limited jurisdiction to pursue perceived violations of ERISA relating to such plans.

Exclusive federal regulation of self-insured plans was designed to permit large employers to administer employee health benefit plans across state lines subject to consistent and uniformly enforced regulatory requirements. Through the DOL agreement, the AG will now have a role in overseeing how such plans operate in New York State.

The focus on mental health parity is likely to be especially challenging. Requirements regarding coverage of mental health and alcohol and substance abuse have rapidly evolved in recent years under both state and federal laws. Such requirements have varied by market and differed depending on whether a plan was insured or self-insured. If the AG conducts retrospective audits for time periods where these requirements were in an almost continuous state of flux, there may be differences of opinion as to the applicable requirements.  New York health plans that offer fully insured coverage have extensive experience working with the AG’s Health Bureau. However, self-insured employers, and TPAs serving such employers, should now be aware that the AG’s Health Bureau will have a role in overseeing their compliance with federal rules.

Get ready to receive your letter in the mail!
In the past several years we have provided Relief to over 30 of our clients who received their DOL Audit letter.  We create an Auditor binder that addresses each request on the audit letter and the required documentation and/or back up for each request; this is all done within the 7-10 day requested response timeframe! Here’s is what our clients have to say:

“Over the past couple of years, our Company has undergone two Department of Labor audits related to employee benefits.  In both cases, Relph Benefit Advisors helped us in gathering the information and presenting to the DOL.   Their expert approach and quality people made a difficult task manageable.” 

Lou Bellina, Director Human Resources, Superior Plus Energy Services


“Relph Benefit Advisors (RBA) took a very stressful event and turned it into a very smooth process.  Within hours of notifying RBA of the DOL audit request, the entire RBA team began to work on pulling the data needed for our response.  In less than the 10-day timeframe, they provided two comprehensive and organized binders for our response.  RBA took on the full charge of the situation alleviating the stress of the audit.”

Amy Ryan, Associate Director of Human Resources, Colgate University


If you would like to receive a copy of an actual DOL Audit letter, please email me directly at lallen@relphbenefitadvisors.com