Additional Terms Addendum
1. Scope of Relationship. As used in this Addendum, the terms Administrator (commonly referred to as the Plan Administrator), Plan Sponsor, Named Fiduciary and Plan Assets shall have the meaning given to such terms by the Employee Retirement Income Security Act of 1974 (ERISA), as amended. ComplianceBug is not the Plan Administrator, the Plan Sponsor, or a Named Fiduciary for any Plan identified on the Plan Application. ComplianceBug does not accept a fiduciary role or status for any Plan. ComplianceBug is and will remain an independent contractor with respect to all services provided. ComplianceBug and the Client are not partners or engaged in a joint venture. ComplianceBug does not collect or hold employee contributions or plan assets.
ComplianceBug is not a law firm and is not providing legal or tax advice. All written or verbal communication provided under the terms of this Agreement are general in nature and not intended to constitute legal or tax advice. The products and services provided pursuant to this Agreement may have legal and tax consequences. Any questions regarding a Client’s particular needs, requirements, circumstances, or the tax consequence of any product or service offered under this Agreement must be directed to the Client’s own advisor(s) at the Client’s expense.
2. Data. To the extent necessary, ComplianceBug will provide Client (or their assigned delegate) a way to provide data necessary to complete each administrative service. Client shall be solely responsible for obtaining all required rights and licenses to use the data and for updating and maintaining the completeness and accuracy of all data. Client grants ComplianceBug a right to use the data for purposes of this Agreement. ComplianceBug is not required to provide administrative services if the data submitted is incomplete, inaccurate or untimely and is not liable for any adverse action based on services provided with incomplete, inaccurate or untimely data. Significant errors, delays or omissions of data will result in the billing of separate fees based on either (i) the current hourly rate of the senior consultant assigned to the project(s) and/or (ii) expedited processing as indicated on either service pricing or fee quote. Such data shall include but not be limited to:
- Legal name of group health plan
- Contact information for the group health plan(s) (if uncertain, ComplianceBug will use any current information in our system)
- Benefits subject to ACA, ERISA and IRC Section 125 requirements
- Employee data and eligibility status
- Participant counts and other Plan financial data
3. Plan Document and SPD Preparation. ComplianceBug will prepare the text for the initial drafts of the required plan document(s) and SPD(s) (“Documents”) for plans pursuant to information provided by Client. Client will make any and all determinations and disclosures as to membership in a controlled group of corporations, a group of businesses or trades under common control or an affiliated services group. The determination of whether such group can be included in a single plan document or multiple plan documents and any resulting Form 5500 obligation(s) will rest solely with the Client. These Plan Documents/SPDs are not customizable for governmental plans, church groups or other entities exempt from ERISA. Customization of the document is limited to a standard set of required information and may not meet the needs of plan sponsors with complex plan designs and/or funding arrangements or those requiring customization above and beyond the standard set of required information and at a level usually provided by contracted legal counsel. The Plan Documents/SPDs provided are written for health and welfare plans subject to ERISA. Severance, pension and retirement plans are outside the scope of this service.
To ensure that the drafts conform with Client’s business structure and requirements before they are officially adopted, drafts must be reviewed by internal or external legal counsel. Client will ensure that the Documents are properly executed and delivered to plan participants as required by law. Thereafter, any amendments or changes to the documents based on new laws, regulations or plan designs are beyond the scope of this agreement and would require purchase of a separate service for that purpose. Such preparation does not include assistance with Form 5500 or any other required filings.
4. Form 5500 Preparation. ComplianceBug will prepare initial drafts of the required Form 5500(s) for plans pursuant to information provided by the Client. Client will make any and all determinations and disclosures as to membership in a controlled group of corporations, a group of businesses or trades under common control or an affiliated services group. The determination of whether such group can be included in a single Form 5500 filing or multiple Form 5500 filings will rest solely with the Client.
Client agrees, as is necessary for ComplianceBug to complete its responsibilities herein, to provide ComplianceBug with all information necessary to complete the Form 5500 return, including participant counts and financial data for applicable schedules, no later than 15 business days prior to the filing due date. Data received less than 15 business days prior to the filing due date will be subject to additional expedited service fees.
Client is responsible for making the determination as to the filing of any delinquent Form 5500 returns, including plan year for which any return is required and the number of plans in place during the period of delinquency. Client is responsible for the payment of any (and all) fines and penalties which may arise in connection with the preparation and submission of any of returns under the Department of Labor’s Delinquent Filer Voluntary Compliance Program.
5. ACA Form 1094 & 1095 Preparation. ComplianceBug will prepare initial drafts of the required 1094-C and 1095-C Form(s) pursuant to information provided by the Client. Client will make any and all determinations and disclosures as to it’s status as an Applicable Large Employer, a group of businesses or trades under common control or an affiliated services group. The determination of whether such group can be included in a single reporting structure will rest solely with the Client.
Client is responsible for making the determination of all employee status, eligibility, and coding by providing all data required for all applicable forms. Data shall mean all payroll, benefits, human resources and similar information on employees or plan participants, including transactional information. Client shall promptly deliver to ComplianceBug the data as required by ComplianceBug in an electronic file format specified by and accessible to ComplianceBug and will include any materials relating to Client and necessary for incorporation in ACA Employer Reporting, including, but not limited to, any human resources documents, payroll, time and labor, benefits, Form I-9, and/or financial data.
Based on services purchased and upon signed authorization by Client, ComplianceBug will:
- prepare final 1094-C and 1095-C forms in “.pdf” format on (or before) a mutually agreed upon due date(s)
- deliver final 1095-C forms to employees, via a Mail Fulfillment Service, on (or before) a mutually agreed upon due date(s)
- electronically submit an encoded file to the IRS, on (or before) a mutually agreed upon due date(s)
Client will be invoiced and be solely responsible for additional service fees to correct any of the above deliverables after the finalization of any forms and/or electronic submission of finalized data.
6. Non-Discrimination Testing Services. Based on services purchased and upon signed authorization by Client, ComplianceBug will administer the annual non-discrimination tests. This includes documentation of non-discrimination testing results and, as appropriate, interpretation and consulting related to any testing failures. Results will be provided to Client in electronic form.
Client shall be responsible for examining all documentation and reports provided by ComplianceBug and shall notify ComplianceBug of any discrepancies between Client Data and Client records as soon as reasonably possible after Client becomes aware of such discrepancy.
If ComplianceBug is informed of a discrepancy between Client Data and Client records within 5 business days of Client’s initial test run, successive tests will be charged at a reduced rate as indicated on ComplianceBug’s product page. The Plan Year being tested and the test bundle must be the same as the initial test to receive the reduced fee. Client shall be responsible for all damages that result or could have been avoided had Client timely reviewed its reports and advised the appropriate parties of any discrepancies, and ComplianceBug shall have no responsibility or liability in connection with any discrepancies not timely reported by Client.
This Addendum is hereby incorporated in any (and all) applicable service agreement(s) between the parties.
Updated April 17, 2019