As a health plan fiduciary, you have a legal obligation to act in the best interests of the plan participants and beneficiaries. Here are some of your key requirements:
- Duty of loyalty: You must act solely in the interest of the plan participants and beneficiaries and ensure that all decisions are made in their best interests.
- Prudence: You must act with the care, skill, prudence, and diligence that a prudent person familiar with such matters would use.
- Diversification: You must ensure that plan assets are diversified to minimize the risk of large losses. This includes risk mitigation measures as well as purchasing reinsurance.
- Compliance: You must ensure that the plan complies with all applicable laws and regulations.
- Disclosure: You must provide plan participants and beneficiaries with clear and concise information about the plan, including its fees and expenses. You must understand what your covered service providers cost as well as have them disclose their compensation.
- Monitoring: You must regularly monitor the plan’s performance, fees, and expenses and take action as necessary to ensure that the plan remains in compliance with its obligations.
Failure to meet these requirements could result in legal liability and financial penalties. It is important for health plan fiduciaries to understand their obligations and take steps to ensure compliance with all relevant laws and regulations. Additionally, consulting with legal and financial professionals can help ensure that you are meeting your fiduciary responsibilities. Do you want to learn more about your fiduciary duty? Contact us for a webinar provided by BMPC and their ERISA Attorneys.
