Employers are having fits over recent postponements under the Affordable Care Act and the administrative burden that has not been postponed. Keeping up with the administrative details all falls into what every person who manages a health plan will have to do. That person, by the way, is probably your employer and an ERISA fiduciary.
All that administrative detail falls into one important task of a fiduciary: effecting plan documents. Your clients need to do all this, nothing more, and nothing less. You want to tell your clients this and use it to sell your prospects.
First, let us look at the definition of a fiduciary under ERISA. It's what your employer does that counts, not their job title. An ERISA health plan fiduciary is either:
* Who is the person who can exercise discretionary control over the plan, and/or,
* Who has control or authority over the health plan management?
Every employer has a fiduciary on their health plan. A duty of an ERISA fiduciary is to effect the plan documents. Your employer cannot miss one iota of the new law, regulations and plan provisions or the taxes will fly. Additionally, if the fiduciary breaches his fiduciary responsibility, he is personally responsible for financially making the plan whole and for fixing the error.
Remember the phrase, effecting plan documents. The ACA is the 800-pound gorilla in the room for effecting plan documents. It will throw a completely new pile-on of administrative requirements into the effecting plan documents requirement.
Never before has an employer been saddled with such complicated and sheer number of tasks to run a health plan. Your employer needs a lot of help, a lot of quick learning - and that's where you come in.
Solely and exclusive
A person who fits one of the two tests noted above must run the health plan solely in the interest of plan participants and beneficiaries and for the exclusive benefit of providing benefits and paying plan expenses. The two operative terms in this rule are solely and exclusive.
The term solely means you can have no other interest than the plan participants when working on their behalf for the plan. Tell your customer to interpret the term solely in a strict manner because that is how the courts interpret it.
The word solely may mean not in your employer's interest. That gets into the weird zone really fast, but it is true. The same is true of the term exclusive. Your customer has to operate the plan exclusively for the plan participants, no other interest.
Fines for breach of fiduciary responsibility range, but can include taking personal property of the fiduciary to satisfy the breach. The fiduciary is personally liable for any breach of responsibility. Are you telling your prospects and groups these true facts? It is a pretty safe bet that your competition is not.
ERISA does not delineate between retirement and health plans on fiduciary responsibility. These rules, harsh as they may be, apply equally to all employers with a health plan whether the plan is insured or self-funded. Hit the road and talk up that the complexities of ACA and ERISA's fiduciary responsibilities. Your client needs you now more than ever.
Davidson, CEBS, is founder of Davidson Marketing Group and FutureOffice Network. He is also on the faculty at the Sheldon B. Lubar School of Business at the University of Wisconsin, Milwaukee. Reach him at firstname.lastname@example.org.
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