ERISA was enacted in large part to protect pension plans. It also imposes significant obligations onto qualified health and welfare benefit plans (QHWBP). Title I of ERISA contains a strict fiduciary code of conduct that must be adhered to by both plan sponsors and administrators. Under ERISA, plan fiduciaries are assigned with critical oversight functions concerning QHWBPs. They must act solely in the interest of plan participants and beneficiaries for the exclusive purpose of providing plan benefits and defraying reasonable expenses of administering the plan. In many instances, a large corporation will utilize a third party to adjudicate claims on behalf of plan participants. Whether or not this third party is a named fiduciary in the plan instruments, the employer remains a co-fiduciary and according to the DOL is obligated to monitor activities and performance of other fiduciaries (Tittle v. Enron Corp., No H-01- 3913 – amicus brief (S.D. Tex., 2005)).
For example, the appointed fiduciary has a duty to review trustees’ and other fiduciaries’ performance at reasonable intervals in a manner that would reasonably be expected to ensure that their performance has been in compliance with plan terms and statutory standards. Thus, fiduciaries have a duty to monitor appointed fiduciaries, ensure that they are performing their duties and take appropriate action in response to the appointees’ failures.
Most employer groups do not appreciate how proprietary contracts impede their fiduciary duty to monitor plan assets. Likewise, providers are often on the losing end when they rely solely on the ASO/Third Party Administrator to communicate plan terms to ensure proper reimbursement for its self-funded claimants.
A plan fiduciary must act with the care, skill, prudence and diligence that a
prudent person acting in a similar capacity and familiar with such matters
would use in conducting a similar enterprise or facing similar goals.
The key to successful appeals, on self-funded claimants, is having access to the plan terms. Asking the carrier to forward such information is fruitless 99% of the time for two reasons. Firstly, the ASO is rarely considered the "Plan Administrator" of the plan and 2) even though they are legally obligated to follow plan terms, they rarely sight plan terms nor refer to the SPD (Summary Plan Description) when providing justifications for adverse benefit determinations. Genesis Medical knows how to navigate these roadblocks to set the stage for a successful appeal. Additionally, as a licensed broker and former CE Instructor, my team and I are capable of bringing a depth of knowledge that is unsurpassed when negotiating carrier contracts. That's a topic for a future blog - so stay tuned.