There is nothing preventing an insurance contract/policy year to be longer than 12 months, it is, however, impermissible under ERISA, ACA and the Internal Revenue Code to have the plan year longer than 12 months. Therefore, when an employer extends their insurance policy (e.g. 13-month rate guarantee) or changes their renewal date (e.g. mid-year carrier change) if they also are considering changing their ERISA plan year to keep it consistent with their policy renewal date, there are compliance issues to consider.
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Disclaimer: This blog was written by Michelle Turner, MBA, CEBS, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel.
The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.
This article was last reviewed and up to date as of 10/13/2020.