Help, my Pension Plan is being audited!

By Bill Watt

Pension plans can be audited for any number of reasons; PA discrepancies, late payments of contributions, or simply by chance.  It often comes as a surprise to employers when “The Letter” from Revenue Canada or pension regulators informs them that not only is their Defined Contribution Pension Plan being audited, but the auditors will be arriving in a few weeks.  Some plans we look after have been audited more than once, while others have yet to be audited.

What should plan sponsors do if they are being audited?  Contact your plan consultant as soon as possible to help you prepare for the audit. In our experience, clients preparing for their first audit, without assistance from their consultant, usually underestimate the amount of time needed to assemble and organize the documentation required. Occasionally, specific documents requested by the auditors are not part of your plan governance and it is advisable to have your consultant review this material before the audit meeting.

The audit begins with a meeting between the plan administrator, your consultant and the auditors. Once that meeting concludes, your consultant becomes the auditor’s main contact person, while you and your staff continue with regular duties.

Important points to keep in mind:

• If the date set for the audit needs to be changed, the auditor should be contacted immediately as they are generally agreeable to changing the date to accommodate you.
• When the auditors arrive makes sure all documents they require are well organized in tabbed binders – they appreciate that.
• Provide the auditor with a workspace that has privacy, good lighting, a large work surface, and wall outlets.

At the conclusion of the audit, a report will be presented to you outlining the results of the audit, the auditors’ recommendations and outlining what, if any, items require further attention.

Managing Long Term Disability Claims

By Tina Coon

How do you manage a casual absence that turns into a long term disability claim?  For some employers this question is easy to answer as they already have policies and procedures in place that are both equitable and fair.  For most employers, however, a common response is  “We don’t have anyone on claim right now, so we’ll deal with it when it happens”.  While employers understand the need to manage absences, they are often mystified when faced with the task of designing a disability management program. How long do you continue to offer a disabled employee Extended Health and Dental benefits?  If their disability is going to prevent them from returning to work indefinitely, can they be severed? What happens to their life insurance coverage if we change insurance carriers?  Who is responsible for communicating with the employee while they are on LTD?

Co-ordination Of Benefits

By Derek Steger and Bev Blake

Co-ordination of Benefits is used by the insurance carrier to determine who the first payor will be in the event that an insured person/dependent is covered for similar benefits under another plan.  Benefits payable under the employee’s policy will be reduced, when necessary, so that no more than 100% of eligible expenses are jointly paid by their plan and all plans which come before it in the Order of Benefit Payment.

The Order of Payment is determined by applying standard rules to the various plans which cover eligible expenses.  The rules are applied from first to last until an order is established:

Paramedical Coverage

By Brent Delveaux and Queenie Yeung

Paramedical practitioner coverage is an integral part of a benefit plan and includes services like massage therapy, chiropractors, physiotherapy etc. They are often the second highest claimed category after prescription drugs in extended health care coverage. This can be a conundrum for plan sponsors because on one hand, employees can prevent absenteeism and/or presenteeism by taking care of their health instead of taking time off or using long-term medication. On the other hand, these claims are costly and there could be the question of whether employees are using these practitioners as a “feel good” tool instead of using them when they are medically necessary.

It is important to note that insurance companies have controls set in place for the payment of these claims. They will verify that practitioners are registered before payments are issued and they will only pay up to their reasonable & customary (R&C) guide. It is important that employees understand that there are R&C limits within their plan and that a $200 one hour massage would not be fully reimbursed regardless of how much is left in their maximum.

Employee Communication

By Joe Demelo

As an employer, communicating with your workforce is a delicate balance of being informative and trying to pursue a particular company objective.  It becomes even more challenging if the
central theme is a sensitive issue such as healthcare and benefits. So how should an employer effectively communicate around these sensitive issues without the perception of interference in employee choice? The simple answer is….delicately and straightforwardly.

Before taking on the challenge of the message, the issue must be worth communicating. An effective and directed communication strategy can impact how employees consume healthcare and in turn affect benefit plan costs. There tends to be very little understanding into the complexities that go into the consumption of healthcare benefits. We happily take our prescription from our physician to the pharmacist without much thought beyond what we pay out of pocket. Although this is a broad and sweeping statement it is probably not too far off for most employees.  With that basic foundation, how then can we expect the average employee to fully understand the intricacies of their plan, employer changes that may have been made to curtail costs, and how they can play a role in cost reduction. The importance of how the message is crafted is as critical as the “what” is being communicated. Below are a few thoughts to help you tackle your next benefits communication…..