As it is often said, “the only constant in the world is constant change,” so it is important for health plan fiduciaries to periodically review the fundamentals for consistency and compliance to avoid risk and costly mistakes. Below is a Health Plan Fiduciary Checklist with five (5) actions that health plan fiduciaries can take to help keep your organization safe and successful.
- Identify the fiduciary who is responsible for health plan administration. Risks can arise if fiduciary actions are not taken or overseen by the appropriate fiduciary.
- Make sure all plan documentation (plan, SPD, communications, committee charter if applicable, etc.) is regularly updated. If the responsible fiduciary has not been properly appointed or assigned responsibilities, the responsible fiduciary may not have appropriate authority and any other fiduciary named in the documents may be liable for not knowing about or performing its responsibilities.
- Identify the responsibilities of the health plan fiduciary.
- Vendor selection and monitoring—Is there a prudent process of selecting and monitoring vendors to provide plan administration services? Without a prudent process, which matters more than ultimate results or decisions, it can be difficult to defend against lawsuits.
- Focus on contracting—Do vendor contracts adequately protect the plan and plan participants from vendor mistakes and provide plan fiduciaries sufficient means to monitor vendors? If not, the plan sponsor and plan fiduciaries may be liable for vendor mistakes.
- Claim and appeal decision-making—Failure to timely decide claims or follow claims procedures can forfeit deferential treatment by courts of claims decisions. Even health plans that have delegated the responsibility to their third-party administrators or insurers remain obligated to monitor performance.
- Train the health plan fiduciary on the above responsibilities and on the litigation risks. Fiduciaries can be found personally liable for not knowing and undertaking their assigned responsibilities.
- Document the training and the processes and monitoring described above. Being able to provide the right evidence is an important component of any defense against litigation.
If anything in this checklist gives you pause or concern, take 5 minutes to reach out to us. We would love to have a short conversation with you to give you confidence that you are moving in the right direction and to support your fiduciary “health” with your health plans in 2024.
The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.
