Understanding Fiduciary Responsibilies with Group Health Plans

Understanding Fiduciary Responsibilies with Group Health Plans

What Are The Essential Fiduciary Elements Of A Plan?

“Each plan has certain key elements. These include:

A written plan that describes the benefit structure and guides day-to-day operations

A trust fund to hold the plan’s assets.

A recordkeeping system to track contribution and benefit payments, maintain participant and beneficiary information, and to accurately prepare reporting documents.

Documents to provide plan information to employees participating in the plan and to the government.”

Who Is A Fiduciary?

“Many of the actions involved in operating a plan make the person or entity performing them a fiduciary. Using discretion in administering and managing a plan or controlling the plan’s assets makes that person a fiduciary to the extent of that discretion or control. Thus, fiduciary status is based on the functions performed for the plan, not just a person’s title. As noted above, group health plans can be structured in a variety of ways.

The structure of the plan will affect who has fiduciary responsibilities. Most employers sponsoring fully or partially self-funded group health plans exercise some discretionary authority and therefore are fiduciaries. If the employer sponsors a fully insured plan, fiduciary status depends on whether the employer exercises discretion over the plan, fiduciary status depends on whether the employer exercises discretion over the plan.

A plan must have at least one fiduciary (a person or entity) named in the written plan, or through a process described in the plan, as having control over the plan’s operation. The named fiduciary can be identified by office or by name. For some plans, it may be an administrative committee or a company’s board of directors. “

From: EMPLOYEE BENEFITS SECURITY ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR