To all those who work in the employee benefits arena, whether in legal, finance, benefits administration, payroll, tax, human resources, or many other disciplines, this is our annual reminder to celebrate the valuable and important work done for employees, beneficiaries, and Plan Sponsors alike.
This year, we focus on the increased attention on all things related to health and welfare plans.
Employer-sponsored health plans are perhaps the most common (and expected) benefit plan offering for employers of all sizes and industries, particularly following the enactment of the Affordable Care Act’s (ACA) employer mandate. While plan designs, healthcare costs, and the delivery of healthcare services themselves have considerably evolved over the years, the compliance burdens and risks associated with maintaining such plans are evolving as well.
Over the last few years, we have highlighted the mounting compliance concerns for employer-sponsored health plans. Beyond the Employee Retirement Income Security Act (ERISA), the federal tax code, COBRA, HIPAA, and the ACA, group health plans must navigate mandates imposed under the Mental Health Parity and Addiction Equity Act (MHPAEA) and transparency requirements under the Consolidated Appropriations Act of 2021 (CAA). On top of these federal considerations, plan sponsors and fiduciaries must also navigate benefit offerings in a post-Dobbs-world where varying state legislation, regulation and litigation are pushing at the boundaries of ERISA preemption. Most recently, these efforts have raised questions surrounding the provision of fertility/IVF benefits and transgender benefits.
Similarly, while the bulk of ERISA fiduciary litigation, and specifically class action litigation, have been focused on qualified retirement plans holding significant plan assets, there is renewed attention on group health plans. Rising healthcare costs, complex designs, and an increased focus (both state and federal) on pharmacy benefit managers (PBMs) have thrust the fiduciary process surrounding these plans into the spotlight.
With so many moving pieces and evolving guidance, plan sponsors are well advised to revisit their governance and administration surrounding health and welfare plans. This includes confirming the fiduciary process in place and following best practices surrounding the administration and decision-making related to these plans. Just as in the retirement plan context, plan fiduciaries need to engage, monitor, and leverage trusted vendors in this space. Given the complexities in benefit design and cost structures embedded in health plans, a prudent process that uses all available resources is key to establishing a plan design and structure that maximizes value for participants.
And don’t forget the proper handling of claims and appeals. ERISA has specific processes and timelines for handling claims and appeals. Strictly following that process (as outlined in plan documents and summary plan descriptions) allows for a deferential standard of review should a claim dispute head to litigation. As part of that process, plan sponsors and fiduciaries often receive requests for documents and plan or claim-related information from medical providers and attorneys in an attempt to collect payments from plans. These requests should be reviewed timely and carefully with legal counsel and third party administrators to determine what should be provided and when.
In short, on this National Employee Benefits Day, as with all others, important work continues. While the considerations applicable to health and welfare plans are not new, they are complicated and an area of increased attention. Please contact a member of the Jackson Lewis Employee Benefits Practice Group if you need any assistance.
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