Health Plan Sponsors Must Obtain Fee Disclosures from Consultants and Brokers

Health plan fiduciaries are now obligated to obtain broad fee disclosures from their group health plan consultants and brokers. Failure to obtain these disclosures and determine the reasonableness of compensation to be received and any potential conflicts of interest that may exist as a result of a service provider receiving indirect compensation from sources other than the plan or the plan sponsor could be considered a breach of fiduciary duty. Consultants and brokers for health plans are also now required to provide plan fiduciaries (usually, plan sponsors) a description of their services and all direct and indirect compensation that they expect to receive for providing their services.

These new rules are already in effect. Both fiduciaries and consultants/brokers should be prepared to comply with the new fee disclosure rules for all contracts entered into, extended or renewed on or after December 27, 2021.

Click here to read the full article written by Gary Blachman and Austin Anderson published in Employee Benefit Plan Review.