Navigating employee benefit plan compliance can feel a bit like a high-stakes maze — one wrong turn, and you’re in a costly trap. If you’re a Tampa business owner, you know the stakes are high. At Hacker, Johnson & Smith, we’ve seen businesses of every shape and size grapple with compliance issues.
From minor oversights to major slip-ups, we’re breaking down the most common mistakes and how to sidestep them, so you can keep your business out of hot water.
1. Overlooking the Local vs. Federal Compliance Divide
One of the trickiest parts of compliance is understanding the balance between federal and local requirements. ERISA sets some big-picture guidelines, but it doesn’t cover everything. Florida has its own unique compliance requirements, and missing these can put Tampa businesses at risk.
Real-World Tip: Think of it this way: managing compliance without local insight is like navigating Tampa Bay without a map. Partnering with a local CPA firm familiar with both federal and Florida-specific regulations can be a lifesaver. With guidance from a firm like ours, you’re not just ticking federal boxes — you’re keeping pace with Tampa’s unique requirements.
2. Inadequate Record-Keeping
Accurate record-keeping is the foundation of good compliance, yet so many businesses are still playing fast and loose with their documentation. Imagine needing to prove compliance during an audit but struggling to locate the necessary paperwork. Not fun, right?
Quick Fix: Move from “organized chaos” to an actual organized system. Digital tools can help you maintain all records securely and allow easy access during audits or reviews. Our audit services in Tampa offer guidance on setting up a reliable documentation system that ensures all records are secure and ready when you need them.
3. Misinterpreting ACA and HIPAA Requirements
The Affordable Care Act (ACA) and HIPAA regulations might sound familiar, but compliance is where many Tampa businesses run into trouble. ACA regulations cover everything from healthcare coverage to mandatory benefits, while HIPAA has strict rules on employee privacy. Misinterpreting these rules can lead to costly breaches, both in finances and employee trust.
Solution: Make sure your HR team is up to date with ACA and HIPAA requirements. At Hacker, Johnson & Smith, we offer specialized training to ensure businesses like yours understand these regulations. It’s not just about compliance; it’s about safeguarding employee trust and company reputation.
4. Incorrectly Reporting Employee Contributions
Accurate reporting of employee contributions might seem like a small detail, but it’s a detail that can make or break compliance. Misreporting contributions, even by a small amount, can have ripple effects in employee pay and tax reporting.
How to Get It Right: Establishing a monthly or quarterly reconciliation process can help catch discrepancies early on. Think of it as a tune-up for your financial systems, much like you’d get your car checked before a long trip. Our Tampa tax audit team can provide expertise on setting up these regular reviews so you can be confident that your numbers are solid and compliant.
5. Failing to Communicate Benefit Details Clearly
If you’ve ever had a confused employee approach you about their benefits plan, you’re not alone. Many Tampa businesses skip the essential step of communicating the details of benefit plans clearly, leading to misunderstandings and, ultimately, compliance risks.
A Simple Solution: Hold annual or semi-annual information sessions to walk employees through their benefits and address any questions. Clear communication can reduce compliance errors and build trust among employees. A trusted Tampa CPA firm like ours can even help facilitate these sessions, making sure your employees understand their benefits fully.
6. Ignoring Regulatory Changes
Regulations evolve, and what was compliant yesterday may not be today. Staying up-to-date with every regulation change, both federal and local, is a job in itself. Many Tampa businesses make the mistake of assuming their current setup will work forever.
What to Do: Regular check-ins with a CPA firm, like Hacker, Johnson & Smith, ensure that your benefit plans are regularly reviewed and adjusted according to any new laws. This proactive approach can prevent last-minute scrambles and unexpected penalties.
Pro Tip: Get your team into the habit of discussing any potential regulatory changes during quarterly meetings. This way, you’re always one step ahead, and no surprises can throw your compliance off course.
7. Skipping Routine Compliance Audits
Think of audits as the doctor’s visit of compliance. Just as you wouldn’t skip your annual check-up, you shouldn’t skip a routine audit. Skipping audits can lead to overlooked issues that balloon into big problems.
Better Safe Than Sorry: We recommend annual or biannual audits for all Tampa businesses. Our employee benefit plan tax audit services provide a thorough review, identifying any weak spots so you can patch them up before they become costly errors. With the right audit schedule, you’re not just catching mistakes — you’re actively working to prevent them.
Final Thoughts
Navigating compliance for employee benefit plans isn’t exactly a “set it and forget it” process. It requires ongoing dedication, careful planning, and often, a bit of outside help. By avoiding these common pitfalls, Tampa businesses can protect themselves from compliance issues and build a stronger, more trusted organization.
Looking for expert guidance? Reach out to Hacker, Johnson & Smith today for a consultation, and let’s make sure your employee benefit plans stay in tip-top shape.