Fiduciary Duty
The Costliest Health & Welfare Plan Mistakes
Could you, personally, afford to pay $1,000,000 if you made a mistake with a participant’s life insurance coverage? Or $350,000 for medical expenses after incorrectly telling a participant a procedure was covered by the plan when it really wasn’t?
One of the most important (and often underestimated) legal requirement is the fiduciary duty placed on those who are involved in managing and/or administering group health & welfare benefit plans.
Fiduciaries can be held personally liable for mistakes and claims if they fail in their fiduciary duty to the benefit plan.
Fiduciary status is based on the functions performed for the plan – not just your title. You are considered a fiduciary if you are involved in any of the following:
It’s especially important to note that most employers have at least one benefit plan where they have fiduciary duty. It is incorrect to assume that if you are fully insured you have no fiduciary duty or responsibilities.
Additionally, professional advisors (including brokers, agents, TPA’s, attorneys, accountants and actuaries) need to be aware of their relationship with the plan. Many advisors now provide additional services for clients that change their role beyond just a professional capacity (e.g., answering participant questions, handling of eligibility & contributions, providing communications, etc.). In doing so, the advisor can be assumed to have taken on a fiduciary role.
Understand your fiduciary duty and responsibility under a group health plan:
These FREE videos, presented by ComplianceBug founder Peter Lewenson, give you a detailed roadmap to ensure your cafeteria plan is compliant. They cover:
“Fiduciary” Is Not A Dirty Word
You’re Still Responsible Even If You Outsource
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