Alliant: ERISA Fiduciary Accountability for Employer Plan Sponsors

ERISA fiduciary compliance is not a new requirement for group health plans, but new fee disclosure and transparency requirements have turned the attention of the plaintiffs’ bar from retirement plan class actions—based on ERISA violations—to group health plans.

If recent history is any indication, group health plan sponsors should take note.

The number of class action lawsuits against retirement plans skyrocketed over the past several years, with most complaints alleging breaches of ERISA fiduciary duty based largely on the fee disclosure requirements now applicable to group health plans. In addition, significant information about the plan—including participant cost sharing, network provider rates and pharmacy drug prices—will be newly available and accessible not only to participants but also to the public, including the plaintiffs’ bar.

This type of litigation is time-intensive, complex, and extremely costly, regardless of the ultimate outcome. The best result is for plan sponsors to avoid involvement altogether, which starts with a robust understanding of ERISA’s fiduciary requirements.

What can employers do to protect themselves?

Plan sponsors should have consistent, clear, and compliant processes and record keeping.

 

Your trusted advisor should help:

  • Document committee meetings and plan-related decisions with compliant note-taking.
  • Provide key information and required documentation, from plan performance and cost evaluation to broker compensation disclosures.
  • Train your team on their role and duties as a plan sponsor fiduciary.

 

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