Key Steps to Meet ERISA Fiduciary Duties for Employer & Association Health Plans
Employer and association health plans must meet ERISA fiduciary responsibilities to protect participants and manage group health plans effectively. These responsibilities require employers to act prudently, avoid conflicts, and prioritize participants’ best interests at all times. To stay ACA compliant, employers should proactively address key fiduciary duties and resolve potential plan management challenges. Additionally, Enrollment First, Inc. supports compliance by offering expert services, while Third Party Administrators help fulfill essential requirements.
Relevant Items for Meeting ERISA Fiduciary Responsibilities:
- Duty of Loyalty: Employers must prioritize participants’ interests, make unbiased plan decisions, and resolve conflicts to avoid fiduciary duty breaches.
- Prudent Selection and Monitoring: Employers must carefully choose and regularly evaluate carriers and TPAs to ensure qualifications, performance, and ongoing ERISA compliance.
- Duty to Diversify: Employers and associations must diversify plan investments to minimize the risk of large losses. Investment options should be chosen based on careful assessment of risk and return, with consideration given to the plan’s demographics, objectives, and risk tolerance.
Challenges and Addressing Them:
Meeting the ERISA fiduciary responsibilities can present challenges for employers and associations. Some challenges include:
- Understanding the Fiduciary Duties: ERISA rules are complex, so employers should partner with experts like EFI to ensure proper interpretation and compliance.
- Data Privacy and Security Concerns: Employers must protect participant data. Therefore, they should use strong safeguards and partner with security focused Third Party Administrators.
- Assessing and Monitoring Service Providers: Selecting and monitoring service providers can be time-consuming and demanding. Employers and associations should establish a rigorous selection process, including thorough due diligence, contract negotiation, and ongoing monitoring. Working with TPAs, such as EFI, can help streamline this process and ensure compliance with the ERISA fiduciary responsibilities.
Enrollment First, Inc and ERISA Fiduciary Responsibilities:
Enrollment First, Inc understands the challenges employers face and offers services that help meet ERISA fiduciary responsibilities and ensure compliance:
- Fiduciary Review and Guidance: EFI reviews fiduciary duties, identifies conflicts, and provides ERISA guidance with recommended best practices for effective plan management.
- Service Provider Evaluation: EFI assists in the evaluation and selection of service providers, including Third Party Administrators. Their expertise ensures that service providers meet the necessary qualifications and capabilities. EFI also offers ongoing monitoring of service providers to ensure continued compliance.
- Data Security Measures: EFI understands the importance of data privacy and security. They incorporate robust data protection measures into their services, ensuring the confidentiality and integrity of participant information.
Working with Third Party Administrators:
Third Party Administrators are instrumental in assisting employers and associations in meeting the ERISA fiduciary responsibilities. TPAs, such as EFI, offer expertise in plan management, investment oversight, and regulatory compliance. Their involvement helps ensure that employers and associations have the necessary support and resources to fulfill their fiduciary duties effectively.
Meeting ERISA fiduciary responsibilities requires careful attention. Therefore, employers can trust EFI and TPAs to navigate requirements and ensure compliance.
Sources:
[1] Department of Labor (DOL) – Employee Retirement Income Security Act (ERISA) Fiduciary Responsibilities: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/erisa-fiduciary-responsibilities
[2] ERISA’s Fiduciary Duty: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/erisa-fiduciary-duty.pdf
[3] Enrollment First, Inc.: https://enrollmentfirst.com/