Offering employee benefits is a great way to attract and retain top talent—but it also comes with a long list of compliance responsibilities that many Colorado employers overlook.
At Conexus Insurance Partners, we partner with HR teams and business owners across the Denver–Boulder area to help make sure their benefit programs don’t just look good—they stand up to regulatory scrutiny.
Here are five of the most common compliance missteps we see, and how your organization can steer clear of them:
1. Missing ERISA Plan Documents 📄
If you offer a group health plan, you’re likely subject to ERISA—even if you only have a handful of employees. Many small and mid-sized employers don’t realize they’re required to provide a Summary Plan Description (SPD) and formal plan documents, even if your carrier provides benefit summaries.
✅ Avoid it: Work with your broker or ERISA compliance partner to create a wrap SPD and ensure it’s distributed to all plan participants. This applies to medical, dental, vision, life, and other group benefits.
2. Failing to Provide COBRA Notices 📨
Federal COBRA laws (and Colorado’s mini-COBRA for groups under 20 employees) require employers to offer continuation coverage to eligible employees after certain qualifying events. Missing or delayed notices can result in costly penalties or legal action.
✅ Avoid it: Make sure COBRA notices are sent on time, and keep documentation that they were issued. If you’re working with a payroll or benefits administrator, confirm they’re handling COBRA notices properly—and that someone’s checking.
3. Outdated Section 125 (Cafeteria) Plans 🧾
If your employees pay for benefits pre-tax, you must have a compliant Section 125 Plan Document on file. Many employers never update these documents after implementation—or don’t have one at all.
✅ Avoid it: Review your cafeteria plan document annually and update it to reflect any benefit changes. If you’re offering HSA, FSA, or dependent care FSAs, this becomes even more important.
4. Incorrect Employee Class Definitions 👥
Are you offering different benefits to managers or executives than you do to other employees? That’s legal—but only if done correctly. Misclassifying employees or applying inconsistent eligibility rules can trigger discrimination testing issues, tax problems, or compliance flags.
✅ Avoid it: Clearly define employee classes and benefit eligibility in your plan documents, and make sure those definitions align with actual practices. Audit enrollment data periodically.
5. Not Tracking & Disclosing Plan Fees 💸
Under the ACA and Transparency in Coverage rules, employers must understand and disclose certain broker compensation and plan fee arrangements. Many aren’t aware this applies to small and mid-sized plans, especially those with self-funded or level-funded structures.
✅ Avoid it: Ask your broker for a breakdown of fees and commissions. If you’re a plan fiduciary, you’re responsible for ensuring fees are reasonable—and that disclosures are made when required.
What to Do Next
- ✅ Audit your current benefits documents and notices
- ✅ Confirm who’s handling compliance tasks—broker, TPA, payroll, or internal
- ✅ Connect with a partner who can help you stay ahead of changing requirements
Let’s Talk
At Conexus, we help Colorado employers simplify compliance and avoid costly mistakes—whether it’s ERISA, COBRA, or fee disclosures. If you’re not sure where your program stands, we’ll walk you through it.
👉 We’re here to help you make sense of your compliance responsibilities—let’s take a look together.
This content is for informational purposes only and does not constitute legal or tax advice. Employers should consult their legal or compliance advisor for formal guidance specific to their plan.