Compliance Services

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Compliance Services from The Difference Card

The Difference card offers ERISA Compliance Services to support brokers and employers to protect themselves from costly penalties. The penalties are steep, the steps complex and the paperwork requirements are outdated.

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To ensure compliance, employers should have a plan document for their self-funded plans, including Health Reimbursement Arrangements, Medical Expense Reimbursement Programs, Flexible Spending Accounts, and Dependent Care Accounts. Even when simply withholding healthcare premiums pre-tax, employers must have and adopt a Premium Only Plans document (POP).

Additionally, employers subject to ERISA are required to distribute the summary plan descriptions to employees. When changes are made, employers must issue amendments and issue employees a summary of material modifications, typically within 60 days of the change. Employers must maintain copies of updated issuing restatements at least every ten years if changes have not been made and every 5 years if modifications have been made.

The Department of Labor is increasing audits and penalties assessed to employers for non-compliance of these documentation requirements. Civil and Criminal penalties can apply for some common ERISA errors.

Sample 2020 Penalties:

  •   $2,233.00 per day for failure to file Form 5500
  •   $159.00 per day for failure to provide requested information to DOL per request
  •   $110.00 per day per person for failure to distribute a summary plan description

Employers should be wary of fees for not distributing the Affordable Care Act (ACA) Summary of Benefits Coverage (SBC) which in 2020 were $1156.00 per failure.

ERISA Best Practices

  • Never back date a plan!
  • Keep your documents up to date; review to make sure they have been updated recently.
  • Design your plan carefully: Never favor highly-compensated employees on a pre-tax basis: the definition of “highly compensated’ can be tricky: to be safe, complete Non-Discrimination Testing three times  a year: before the plan starts, in the middle of the year to check if adjustments to elections are needed, and a final version at the end of the year.
  • Make sure you send a copy of summary plan descriptions via a method your employees can access the document (if employees are issued company computers, it is reasonable to distribute via email and retain proof, otherwise: print and mail!)
  • Don’t forget Form 5500 Filing, annual notices including GINA and CHIP!
  • If an employee asks you for a copy of the plan document, provide them with a copy of the summary plan description right away!
  • Make a decision if a wrap document makes sense for you before adopting. Consult with an ERISA attorney first. There are pros that can simplify compliance; but also hooks.

Difference Card ERISA Compliance Services

The Difference Card can help you and your clients stay in compliance. We provide all our administrative clients unlimited plan documents, amendments, restatements, and non-discrimination testing. All compliance services are fully included to help our clients protect themselves from penalties and fees.

  • Section 125
  • Section 105
  • WRAP Documents
  • And Premium Only Plans


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