Don’t Roll the Dice on Department of Labor Audits

…it’s not a matter of “if,” but “when” you get audited by the U.S. department of labor

By Bill Olson, Chief Marketing Officer at United Benefit Advisors

As the saying goes, an ounce of prevention is worth a pound of cure, and that’s definitely the case when it comes to a health plan audit by the U.S. Department of Labor (DOL). And prevention is certainly warranted, according to Jeff Hadden, Partner at LHD Benefit Advisors (a UBA Partner Firm), because it’s not a matter of “if” you’re getting audited, but “when” you get a letter from the DOL that your company is being audited. Hadden said that 12 of their clients received DOL audits of their group health plans in the past 20 years. However, out of those 12 audits, nine of those clients went through the audit process in just the previous two years. That’s a significant increase and a harbinger that more audits are likely to come from the DOL.

Charting a Course

Like a road map to a destination, this white paper is available as a resource for anyone seeking guidance on DOL audits. It does not replace advice from a qualified individual or agency, but it is a great place to start in terms of educating oneself and referring back to it as needed. Knowledge is power and the more knowledge you can gain prior to an audit will be beneficial.

In this white paper, we’ll delve into how to prepare for the audit, the best way to acclimate your staff to the audit process, what the DOL wants, and complying with requests.

Definition of a DOL Audit

So what exactly is a DOL audit? According to the DOL, the purpose of an audit is not to rehash past mistakes but to look at past events with a view toward improving future performance. Findings from an audit can be used as a basis for adjusting policies, priorities, structure or procedures in order to make operations as efficient, economical and effective as possible.

What can trigger a DOL audit? Usually it’s one of two things — either a complaint, which leads to an investigation, or it’s totally random. Regarding the former, any audit is not limited in scope to the area of the complaint. The audit may cover all aspects of plan administration, often going back several years. Michael J. Cramer, JD, Compliance Officer at Beneflex Insurance Services emphasizes that you should try to audit-proof your company as best as possible in order to minimize any issues when and if an audit does happen.

The resource section at the end of this white paper has links from the DOL that are a “self-compliance checklist” that plan sponsors (i.e., employers) can utilize to help ensure that their plans are in compliance with DOL requirements.

Never Ignore a Notice, Regardless Of the Confidence in Your Team or the Quality of Your Business Practices

Not many things incite more fear than receiving a notice that you’re about to have an audit, especially from the DOL. The DOL is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. It is headed by the U.S. Secretary of Labor.

As the likelihood of an audit from the U.S. Department of Labor increases, UBA is offering new white paper that can help employers prepare:

  • Learn how to audit-proof your company
  • Avoid the worst mistake you can make
  • Conduct a mock audit
  • Get an auditor out of your office as quickly as possible

For additional information on this White Paper, Audit Checklists and Sample Questions contact your Power Kunkle representative


The information provided herein is intended solely for the use of our clients. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher or Publishers of articles within.

The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.