The Annual Compliance Audit Framework
An annual compliance audit is a structured review of a client's health plan compliance status. The audit covers all major compliance areas and produces a written report identifying gaps and recommended remediation. The audit is typically conducted in Q4 to prepare for the coming plan year.
| Audit Area | Key Questions |
|---|---|
| Plan documents | Is the plan document current? Is the SPD current and distributed? |
| ACA compliance | Is the employer an ALE? Is coverage affordable and MV? Is 1095-C reporting current? |
| COBRA administration | Are election notices being sent within 14 days? Are premiums calculated correctly? |
| HIPAA compliance | Are BAAs in place? Is the NPP current? Is the plan document HIPAA-compliant? |
| Required notices | Are all required notices being delivered on time? |
| MHPAEA | Is the comparative analysis complete and current? |
| CAA 2021 | Has the broker compensation disclosure been received? Has the gag clause attestation been submitted? |
Pricing the Compliance Audit
Compliance audits can be priced in several ways. A standalone audit fee of $2,500–$7,500 is common for small to mid-size employers. Some advisors bundle the audit into a comprehensive advisory retainer. Others offer the audit as a loss leader to generate additional advisory work.
The Audit as a Revenue Generator
IQ Insight
The compliance audit is not just a service — it is a revenue generator. Every gap identified in the audit is an opportunity for additional advisory work. A client whose SPD is outdated needs an SPD update. A client without a MHPAEA comparative analysis needs one. A client with COBRA administration issues needs a COBRA process review. The audit creates a roadmap of work that can generate $10,000–$50,000 in additional advisory fees per client.