ERISA Fiduciary Governance (Part 4 of 4)

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Amber Posthauer: Good afternoon, everyone. Thank you for joining us today. We're going to get started in about a minute or so to allow for everyone to get connected. We'll get started shortly. 

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Chase Cannon: We need to snuggle right now. 

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Amber Posthauer: Welcome, everyone, to ERISA Fiduciary Governance, Part 4 of 4, Fiduciary Obligations for Fully Insured and Self-Insured Plans. Thank you all so much for joining us. 

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Amber Posthauer: The Benefits Compliance Team will be answering the questions you send through the Q&A today. We'll try our best to answer all of your questions, but if for whatever reason we're unable to get to your question today, please follow up with your advisor for further assistance. 

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Amber Posthauer: Today's presentation is being recorded. We will be sharing the recording in the follow-up email and on the NFP website. If there are any portions of this call that you missed, by Monday, you'll receive an email with a link to the full recording. The PowerPoint slides used during this presentation will be shared in the same email. 

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Amber Posthauer: At this time, I'll hand it over to Chase Cannon, Senior Vice President and Deputy Chief Compliance Officer at NFP. 

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Amber Posthauer: And also Carol Wood, Vice President and Council of NFP Benefits Compliance. Chase, the floor is yours. 

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Chase Cannon: Thanks so much, Amber. Thanks, everybody, for joining the call today. This is exciting. We are on part 4 of our ERISA Fiduciary Obligation call series, and we're really excited that you guys are sticking around, and everybody that's joined is still with us. 

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Chase Cannon: through Part 4 here, it's a lot to take in, it's a big… 

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Chase Cannon: Assignment and project and obligation that you have as a sponsor of your plan. And so, hopefully these webinars have been helpful. 

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Chase Cannon: And hopefully, there's… they're starting to… starting to feel okay about… about the whole thing. So, today, we're gonna focus heavily on the, differences between fully insured and self-insured plans. 

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Chase Cannon: looking at some very specific, laws to follow under the wider umbrella of your ERISA fiduciary obligation to, follow all the benefits compliance laws that you have to with respect to your plan. 

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Chase Cannon: And so, we'll be walking through those, and again, with each of those laws, we're going to be reviewing this through the lens of your fiduciary obligations and the differences and the extra focus, for the most part, that you're going to have if you sponsor a self-insured plan. 

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Chase Cannon: Again, we've covered this on prior webinars, but when you have a self-insured plan, everything goes up as far as responsibility and heightened awareness and 

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Chase Cannon: the number of items that you have to track and follow, everything just gets amplified in that self-insured space, so… 

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Chase Cannon: So, let's jump right in, I guess, first of all, and I'm trying to figure out how to… 

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Chase Cannon: Change our slides, here we go. So, in case you have forgotten what Carol and I look like, here's a beautiful picture of both of us. 

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Chase Cannon: And, we've kind of been your hosts on the four-part series with our fiduciary governance here. 

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Chase Cannon: So there's that. As usual, we have kind of a disclaimer. This webinar is really intended to be used for general guidance purposes only, not intended to constitute tax or legal advice, and really remember to engage your own legal or tax counsel if you have specific questions. 

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Chase Cannon: Or, wonder about specific application of the things we're talking about. And then our information is current as of today, September 17th. 

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Chase Cannon: 2025. So with that, let's look at our agenda. Quite a bit to get through, but, I promise this won't be as heavy as it looks, and we've got some great resources and takeaways at the end, and so… 

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Chase Cannon: Try and just listen. You don't have to memorize all this. We will make the slides available afterwards, and the recording afterwards. But you can see we have, kind of, 5 or 6 different laws, and then some subcategories underneath those laws. 

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Chase Cannon: And so, we're gonna be talking 

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Chase Cannon: First of all, sort of the differences and the reasons why you might be fully insured versus self-insured. 

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Chase Cannon: And then we'll dig into 

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Chase Cannon: Fiduciary duties and plan assets, preemption and coverage mandates. 

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Chase Cannon: And then claims, procedures, reporting, and disclosures. All of those kind of fall under the broader umbrella of ERISA. 

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Chase Cannon: Which is the primary law we're talking about when we talk about fiduciary duties. 

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Chase Cannon: And then we'll jump into some other laws where following the law is really important, and the requirements that you have to follow vary a little bit from self to fully insured under COBRA, HIPAA, ACA, nondiscrimination, and transparency. 

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Chase Cannon: And then we'll get to those resources. So, quite a bit to get through, and… but we're excited about this. I'm going to flip it over to Carol right away to talk about, you know, this overview. What are we really talking about, and what are some of the important distinctions 

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Chase Cannon: When it comes to just fully insured versus self-insured, generally. 

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Carol Wood: Thank you, Chase, and good afternoon, everybody. Thank you for joining us. 

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Carol Wood: Yeah, and this first section, it says we want to do an overview and also define some of the terms that we're using. 

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Carol Wood: So what does it mean to be fully insured versus self-insured? Of course, we know with fully insured plans, the employer's contracting and paying the premium to the insurer, and the insurer is assuming the financial obligations 

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Carol Wood: for all plan claims and administrative costs, with self-insured plans, the employer assumes 

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Carol Wood: Responsibility for all financial risks of plan claims and costs. 

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Carol Wood: So this is really the… the big distinction. That risk, that financial risk, is not transferred to a third party. 

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Carol Wood: Although stop-loss coverage can reduce some of the employer's risk. 

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Carol Wood: Now, a level-funded plan is a hybrid solution. The employer's paying a set monthly amount to the insurer to cover 

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Carol Wood: Estimated claims, the stop loss premium, and plan administrative costs. 

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Carol Wood: And of course, they're lower than expected. They may receive some type of a surplus refund. 

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Carol Wood: But for compliance purposes, level-funded plans are generally considered self-insured plans. Unfortunately, I mean, to be honest, we don't have really clear guidance from regulators regarding level-funded plans. They do have their nuances. 

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Carol Wood: So generally, we're just going to look at them, though, as self-insured plants. 

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Chase Cannon: Yeah, and that's a big deal, right, Carol? I mean, we get a lot of questions on level funded, what does that mean? And a lot of people are unaware that that could be treated as a self-insured plan, so great clarification there. 

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Carol Wood: Important to know. What is stop-loss insurance? Well, for self-insured plans, stop-loss coverage is normally designed to protect the sponsor against higher than expected claims experience. Under the stop loss policy, the insurer agrees to reimburse the employer for individual or aggregate claims 

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Carol Wood: Paid in excess of a specified amount, the attachment point. 

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Carol Wood: A specific point would provide protection from large dollar claims incurred by a covered individual, and an aggregate one provides protection from high claims across all participants and beneficiaries. 

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Carol Wood: Stop-loss policies vary widely. I think an hour presentation could be done on stop-loss coverage, but it's important, therefore, that sponsors should 

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Carol Wood: Ensure they contract carefully and understand the policy details. The coverage period, the application, does it apply to claims incurred and paid? 

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Carol Wood: To avoid any gaps. 

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Carol Wood: And this type of coverage is very important in managing financial risk for many employers, but the stop loss carrier doesn't have any obligation to pay the claims of plan participants, so the risk really remains with the sponsor of that self-insured plan. 

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Carol Wood: One of the potential advantages of self-insured plans over fully insured ones? Well, a big one is that the coverage can be customized to the employer's goals and their population. 

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Carol Wood: The plan is not subject, as we'll be discussing, to state insurance laws and mandates. And this is a risk of plans, governmental plans. 

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Carol Wood: Of course, maybe, and MEWAs, multiple employer welfare arrangements are subject to state insurance laws. The employer has control over selecting, more controls, selecting, monitoring, and coordinating service providers. The employer may be able to retain funds if health claims are lower than expected. 

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Carol Wood: And potential cost savings also, because unlike insured coverage, there's no profit or risk margins that are being paid to the carrier or state premium taxes. 

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Carol Wood: What are potential disadvantages of self-insured plans over fully insured plans? 

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Carol Wood: The employer is exposed to financial risk of loss due to unexpectedly high claims. That's really the big one. And these costs and expenses can be unpredictable. 

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Carol Wood: The plan typically requires greater involvement by the employer, from internally, their internal teams, HR, finance, legal, risk management, etc, and also from external service providers, TPAs, actuaries. 

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Carol Wood: consultants, lawyers. The big distinction, though, the one that we're going to be focusing on today, is that the employer has increased fiduciary and compliance obligations 

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Carol Wood: Because these obligations are no longer shared with the carrier. The employer is ultimately responsible for compliance, even if they receive assistance from a TPA or ASO. 

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Carol Wood: And it's really important to understand these obligations, primarily to run your plan well, but also to avoid any penalties or lawsuits that could resolve from errors or oversights. 

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Carol Wood: Okay, now I want to, move to, 

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Carol Wood: fiduciary duties and plan assets, and this is Scott, I'll warn you, it's kind of a tough topic, but, but, you know, just bear with us. It's a short segment, just two slides. 

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Carol Wood: Okay, how does the plan funding process differ for a self-insured versus fully insured plan? 

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Carol Wood: And the main distinction here in the process is that a self-insured plan has to project plan costs, where a fully insured plan's costs are set by the carrier's premium rate. Otherwise, both self-insured and fully insured plans have to determine the funding method and the payment mechanism. 

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Carol Wood: And the sponsor has flexibility, but the choice can impact their compliance obligations. So for the self-insured plan, they're going to have to project what those costs are, actuaries would be involved with that process. 

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Carol Wood: And the projections are normally based on past costs and assumptions about future obligations. Sponsors… this allows sponsors to plan financially, set participant cost sharing, and understand their financial exposure. 

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Carol Wood: Of course, actual cost may differ, and that's where the stop loss coverage comes in, to protect against unlimited cost risk. 

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Carol Wood: Determining the funding method There are 3 main funding methods. 

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Carol Wood: Benefits can be paid from the employer's general assets. 

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Carol Wood: And this is what we call an unfunded plan. 

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Carol Wood: And we're trying to reserve the use of the word funded, we're trying not to say self-funded when we mean self-insured, and reserve funded to mean, you know, is the… is… are the benefits being paid from the employer's general assets and unfunded plan? 

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Carol Wood: Or are they being paid from separate funds, that are maintained in a separate account exclusively for purposes of the plan, such as a trust. 

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Carol Wood: And then, typically, also, there are contributions made from plan participants and beneficiaries. Now. 

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Carol Wood: We know that the vast majority of employers fund their benefits through general assets and not through a trust, and we'll explain that a little more in detail on the next slide, and what the rules are. 

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Carol Wood: The… for both… both types of plans, we know that certain fiduciary duties attached to plan assets And… 

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Carol Wood: Plan assets include participant contributions to premiums. 

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Carol Wood: amounts attributable to plan assets, such as rebates and MLR rebate season, that's a good example, and also funds held in separate accounts or trusts to pay plan benefits, and 

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Carol Wood: ERISA, the general rule is actually that all plan assets have to be held in a trust. 

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Carol Wood: And of course, for those of us who have worked on the retirement side, we know this is always the case, right? There's always going to be a trust to hold those plan assets. 

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Carol Wood: But on the group health plan side, the DOL doesn't enforce this requirement for these participant premium contributions, but there are certain rules that the employer has to follow. They have to make sure 

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Carol Wood: That they timely forward. 

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Carol Wood: the premium payments to the carrier once they're withheld from employees' pay, that's for an insured plan, or use the amounts to pay plan benefits for a self-insured plan. And additionally. 

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Carol Wood: the amounts have to be paid from the employer's general assets, and not maintained in a separate plan account. So, employers need to be careful. You don't want to set up an account in the plan name. Be careful also with conduit accounts, those in-between accounts where money isn't going directly from the employer's general assets. 

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Carol Wood: So, a sponsor of both types of plans will always have to determine if the benefits are going to be paid from general assets, that unfunded plan, or in that separate account or trust, a funded plan. 

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Carol Wood: And… 

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Carol Wood: When an employer is switching from a fully insured plan to self-insuring, it's probably a good time to revisit that decision. 

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Carol Wood: In some cases, a trust may be required, that could be under a collective bargaining agreement, but it can also be chosen for 

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Carol Wood: for accounting tax or legal reasons, and one legal reason is that the funds are protected from creditors normally when they're held in a trust. Of course, counsel or a tax advisor should always be consulted for guidance. If an employer does go the trust route and 

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Carol Wood: It's usually a self-insured employer that does, but again, it's probably the exception rather than the rule in most cases. There are significant compliance obligations that attach, and that would include trust document, appointment of trustees, who are fiduciaries. 

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Carol Wood: A fidelity bond to protect against fraud, Form 5500, that's regardless of the plan size, and also an accountant's opinion of the plan's finances. 

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Chase Cannon: Yeah, so a lot to consider there, Carol. This is super helpful to kind of walk through the different funding methods. 

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Chase Cannon: for a self-insured plan, and reasons why you might go one route or the other, right? Like, in some instances, it may make a lot of sense to establish a trust. There's some tax advantages that can come along with 

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Chase Cannon: formation of certain trusts. Obviously need, attorney help to do some of this, but… 

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Chase Cannon: But there may be good reasons for that, but being aware of that… the consequences of that decision, right? You're gonna have these additional compliance obligations, you're gonna be considered funded, and that's gonna change a little bit of what your compliance profile looks like. 

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Carol Wood: And either way, I mean, we do want to emphasize that, you know, and we spoke about this in the earlier sessions, that, you know, it's that duty of loyalty and exclusive benefit rule that attaches, right? As soon as you have those plan assets, you know, they really need to be used for the exclusive benefit of the plan and participants. 

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Carol Wood: And, you know, employers really need to take great care which… whichever way they go in the funding decision. 

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Chase Cannon: Right, right. Being aware of that, and making… making the right decisions once you move forward. I'd say that the vast majority of our clients probably pay out of their general assets, right? So they're considered self-insured, but unfunded. 

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Carol Wood: Correct. 

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Chase Cannon: But… 

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Chase Cannon: So, we do see sometimes those trusts coming into play, and again, there might be really good reasons for that. 

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Chase Cannon: So, let's move into some of the differences when it comes to this concept of ERISA preemption and coverage mandates, you know, once we know 

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Chase Cannon: ERISA's attached, there is… there are some… I mean, ERISA's gonna attach no matter what here to a group health plan, but we've kind of decided we're going to be self-insured, we're fully insured as a company. 

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Chase Cannon: What does that mean for this thing called ERISA preemption? 

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Carol Wood: Sure, and this is a big difference, right, between your fully insured plan and your self-insured plan. State insurance coverage mandates, we know these apply to fully insured plans, but they don't apply to ERISA self-insured health plans. Again, except… except for me, was… 

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Carol Wood: And so as an example, a large, fully insured plan that's CITUS in New York has to comply with the state's fertility benefit mandates, and there's specific, requirements to cover in vitro fertilization, and 

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Carol Wood: reference to the… to the applicable website there, but a self-insured plan is… in New York is not going to be subject to these requirements, right? They don't have to comply with state insurance mandates. 

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Carol Wood: And why are the two types of plans treated differently? And generally, it's because ERISA preempts, it supersedes state laws that relate to ERISA plans. So that means these laws can't be enforced against self-insured plans. 

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Carol Wood: And part of this was that goal, of ERISA that an employer operating in different states, didn't have to comply with various state laws, and could have more uniform benefit administration. 

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Carol Wood: Now, I know we see that concept being tested with our state PBM laws and in many other areas. 

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Carol Wood: So it's definitely an area where you see a lot of litigation, unfortunately. But I think this is clear as far as the state insurance laws. They don't apply to self-insured plans. You know, and the exception to that rule is for fully insured plans. 

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Carol Wood: They have to, of course, follow the regulations of 

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Carol Wood: you know, the state insurance departments, and ERISA as well. 

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Carol Wood: So what coverage restrictions, then, do apply to a self-insured plan? 

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Carol Wood: Well, sponsors of self-insured plans have wide discretion in terms of plan design, including certain coverage limitations and exclusions. There are certain rules. 

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Carol Wood: First of all, just to receive tax-free treatment, the expenses have to qualify as 213D medical expenses, and just following through with our example before of fertility treatments. 

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Carol Wood: You know, it sounds simple, yes, it has to cover medical expenses, but not all fertility treatments would qualify. Generally, the treatment has to be to cover a disease or medical condition, and there's certain parameters for what they're going to cover or not. 

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Carol Wood: Additionally, a self-insured plan has to select a state benchmark plan, and this identifies certain benefits that are covered as essential health benefits. 

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Carol Wood: The self-insured plan is not required to cover these essential health benefits like small groups and individual plans do, but if these are offered, the plan must follow the chosen state benchmark. 

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Carol Wood: And can impose annual or lifetime dollar limits on those EHBs. 

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Carol Wood: Now, note that a stop-loss carrier isn't subject to these requirements, so it's always important, you know, if the employer, you know, is covering an essential health benefit under the benchmark. 

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Carol Wood: And there aren't these limitations, you know, are there limitations on the stop loss coverage? You know, you'd always want to be coordinating with that stop-loss carrier. 

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Carol Wood: The self-insured plan sponsor 

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Carol Wood: can select any state benchmark plan. So, that plan sponsor in New York, could go ahead and choose the Utah benchmark plan. 

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Carol Wood: And that actually is a very popular plan. I think employers find it has a lot of flexibility. So… so employers should know that. They don't have to choose the plan in their state. 

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Carol Wood: And I think they should make their decision carefully. The decision should be documented, and of course it has to be communicated to the TPA and ASO. 

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Carol Wood: And there's more information on the various state benchmarks at this CMS website. 

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Chase Cannon: Yeah, that's an important decision, right? And does come back bring you back to kind of that fiduciary governance. This is… 

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Chase Cannon: the ability and the thought that goes into which state benchmark plan you're going to choose is something you need to think about, based on your employee base, right? And the type of benefits you want to offer, and those that might be… 

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Chase Cannon: Most beneficial to… Participants. That doesn't mean you have to

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Chase Cannon: you know, you're limited by a certain state benchmark plan. As you said, you can really select any state benchmark plan, but just… 

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Chase Cannon: Making a conscious decision which one, going through the analysis of which one is… what are the limitations on each of those, and kind of why you got to that conclusion is important for fiduciary purposes. 

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Chase Cannon: carol, what other coverage requirements. 

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Carol Wood: Sure, the federal benefit mandates still apply to self-insured plans, just like they do to fully insured plans, so they have to cover ACA preventive care services, you know, this is… 

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Carol Wood: screening, immunizations, etc, and there's a lot of focus on this now, right? Perhaps we'll see some changes in what's covered or not. I think that's an area to watch. But, self-insured plans, just like fully insured plans, have to cover those, have to comply with mental health parity requirements. 

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Carol Wood: You know, there's certain other coverage requirements. I won't go through all of them here. And then more recently, though, you know, the patient protections include those under the Consolidated Appropriations Act. We know they had surprise billing, continuity of care. 

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Carol Wood: Expanded coverage for, you know, certain emergency services. So those would apply, to your self-insured plans as well. 

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Chase Cannon: Yeah, great. Good to understand, and you know, sometimes we get confused on what's state law and what's federal law, right? So it's good to kind of see this up on the screen, understand which rules are really

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Chase Cannon: falling under what would be considered state law, self-insured plan wouldn't have to cover those state rules that they do have to follow, and then 

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Chase Cannon: you know, this list of, kind of, federal… so let's stick with the federal. We're gonna go into ERISA a little bit more. 

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Chase Cannon: the disclosures, reporting, and claim procedures, but basic things like plan documents, Form 5500, and then we can talk claims procedures, but how does… 

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Chase Cannon: How does that… what… the funding, self-insured versus full-insured, how's that impacted. 

00:24:02.490 - 00:24:09.630 

Carol Wood: Sure, and I think we can go through this slide pretty quickly, because the reality is this is with the requirement to have an ERISA plan document. 

00:24:09.760 - 00:24:15.860 

Carol Wood: And to follow that document applies both to self-insured and fully insured group health plans. 

00:24:15.890 - 00:24:22.000 

Carol Wood: And that's regardless of size, I'm just emphasizing that, because sometimes we get some questions that. 

00:24:22.000 - 00:24:45.430 

Carol Wood: seem to, you know, think the document applies where the Form 5500 does, you have to have a certain participant count, so just remember, regardless of size, we need that written plan document. And the main difference is that, you know, the self-insured plan is going to normally have a more tailored one, right? They're not, you know, subject to the restrictions of the carrier and what's offered under that policy, so they have a lot more flexibility. 

00:24:45.430 - 00:25:00.099 

Carol Wood: And of course, they just have to be clear that it clearly outlines their employee-dependent eligibility requirements, the covered benefits, any limitations or exclusions, the governance procedures, and how plan assets will be handled. 

00:25:00.180 - 00:25:16.190 

Carol Wood: The employer always has to make sure that that document, their plan document, is consistent with the carrier policy for a fully insured plan, the stop loss carrier agreements for a self-insured plan. 

00:25:16.370 - 00:25:27.940 

Carol Wood: And of course, you know, a wrap document can alleviate, you know, some of the need for separate plan documents in many cases. Both types of plans have to provide that SPD. 

00:25:33.650 - 00:25:36.959 

Carol Wood: How does self-insuring impact the Form 5500? 

00:25:37.340 - 00:25:48.449 

Carol Wood: Again, a lot of similarities here, right? Both fully insured and self-insured health plans with 100 or more participants at the start of the plan year have to file the Form 5500. 

00:25:49.310 - 00:25:54.639 

Carol Wood: small, self-insured funded plans. Any plan through a trust is going to have to 

00:25:54.840 - 00:26:12.209 

Carol Wood: file a Form 5500, regardless… regardless of the plan size. The schedules will vary depending on whether the plan's fully insured or self-insured. Schedule A is completed for self-insured policies only, and Schedule C 

00:26:12.340 - 00:26:30.720 

Carol Wood: for self-insured funded plans. Self-insured plans that pay benefits from general assets are not required to distribute a summary annual report to participants that otherwise would be due very soon for July 31st Form 5500 filing. 

00:26:30.900 - 00:26:42.529 

Carol Wood: But the exception only applies, a colleague reminded just recently that if all plan benefits are self-insured, so that may not always be the case if a RAP ERISA document is used. 

00:26:44.360 - 00:26:59.119 

Carol Wood: Here, I think we may have more of a difference in some cases. How does self-insuring impact claims procedures? Insurers serve as the claims fiduciary for fully insured plans, and are responsible for claims adjudication on the first and second levels of internal appeals. 

00:26:59.520 - 00:27:06.840 

Carol Wood: If applicable, the insurer will engage an independent review organization for further external review of that appeal claim. 

00:27:07.430 - 00:27:09.550 

Carol Wood: Self-insured plan sponsors 

00:27:09.740 - 00:27:20.900 

Carol Wood: usually see discretion over claims review and adjudication to a TPA or ASO, but they can also choose to take part in an internal appeals level. 

00:27:21.030 - 00:27:25.759 

Carol Wood: And if they choose to do so, the plan documents would need to be updated accordingly. 

00:27:25.900 - 00:27:37.990 

Carol Wood: And sponsors that wish to participate in that process, should understand that they're going to be held to the fiduciary standard of a prudent expert with respect to their decisions. 

00:27:38.140 - 00:27:39.609 

Carol Wood: Well, let's take a look at… 

00:27:41.190 - 00:27:48.980 

Carol Wood: What goes into making that decision a little more closely? Should a self-insured plan sponsor handle second-level claim appeals. 

00:27:49.990 - 00:28:05.099 

Carol Wood: And in deciding whether to take a more hands-on role, they really are… the employer's going to have to make sure they have a prudent process in place, to review claim appeals. I know we've been talking about having a prudent process in since the beginning of this fiduciary series. 

00:28:05.210 - 00:28:22.020 

Carol Wood: It's really necessary here. The employer's going to have to strictly comply with all regulatory requirements, including timeframes and notices. Make sure they're interpreting the plan terms consistently and accurately. 

00:28:22.090 - 00:28:33.530 

Carol Wood: And not making exceptions, that's always a no-no. A full and fair review of the denied claim is required. Can't just rubber stamp the TPA's prior decision. 

00:28:33.750 - 00:28:49.449 

Carol Wood: And it's important to gather and analyze medical information and records. Really importantly, consultation with healthcare professionals may be necessary if the sponsor lacks medical expertise to effectively evaluate the claim. 

00:28:49.680 - 00:28:53.419 

Carol Wood: And the decision has to be carefully documented. 

00:28:53.530 - 00:29:06.320 

Carol Wood: So employers assuming a role in that process should also consider whether they want to establish an appeals committee, to help facilitate a consistent and prudent decision-making process. There's a great article 

00:29:06.320 - 00:29:16.500 

Carol Wood: In Compliance Corner, one of our new observations articles, so kudos to that team on a self-insured employer's role in that appeals process. 

00:29:18.430 - 00:29:20.660 

Chase Cannon: Yeah, and that, that, article's… 

00:29:20.680 - 00:29:36.789 

Chase Cannon: really good to kind of break this down into a little bit more bite-sized pieces, right? Like, there's some great bullets on this slide, for sure, but that article, available at NFP.com under our Insights page, where we store Compliance Corner, if anybody's out there and wanting to look at it right away. 

00:29:36.800 - 00:29:52.069 

Chase Cannon: The link will work when we send around the slides, but just kind of talking about it in, in basic terms. What does it mean to be a part of the PEALS process? How do you do that? What are the important points to consider as you're doing it? 

00:29:52.490 - 00:29:58.350 

Chase Cannon: So yeah, it's a… it can be a challenging thing, but also one that, you know. 

00:29:58.490 - 00:30:04.920 

Chase Cannon: It's helpful, and just understanding the basics on it is really helpful, so Thanks, Carol. 

00:30:05.070 - 00:30:08.320 

Chase Cannon: With that, we're gonna move into… 

00:30:08.340 - 00:30:20.070 

Chase Cannon: our COBRA obligations. So, for the most part, we've been in ERISA, which, again, is… ERISA is what's driving all this, right? Our fiduciary duties and obligations are found under ERISA, 

00:30:20.070 - 00:30:29.610 

Chase Cannon: And those are, kind of an umbrella over all the other laws that, need to be considered and followed. 

00:30:29.670 - 00:30:40.659 

Chase Cannon: And, so we just talked a lot about the other ERISA rules that need to be followed. Let's look a little bit at COBRA and the distinctions in COBRA administration for fully insured versus self-insured. 

00:30:40.750 - 00:30:49.649 

Chase Cannon: And really, to set the baseline here, both fully insured and self-insured have this general parameter that a COBRA premium 

00:30:49.950 - 00:30:53.589 

Chase Cannon: has a limit, right? When you're an active employee. 

00:30:53.630 - 00:31:09.120 

Chase Cannon: For an employer, they can kind of decide what the cost share should be, or the employee contribution should be towards coverage, usually. And under the employer mandate, there has to be a limit on that. Employees can only be charged so much, right, under the affordability rules. 

00:31:09.150 - 00:31:21.130 

Chase Cannon: At least for larger employers. But once somebody goes onto COBRA, the employer doesn't have those requirements, and can really charge employees, or former employees, depending on the situation. 

00:31:21.310 - 00:31:31.789 

Chase Cannon: the full cost of coverage, and they can add that 2% administrative… administration charge. So we often hear that 102%. That's where we're getting that. It's the full premium.

00:31:31.930 - 00:31:35.409 

Chase Cannon: And then plus that 2% administration charge. 

00:31:35.780 - 00:31:53.919 

Chase Cannon: So usually for a fully insured plan, you really are just relying on the carrier rate, right? The applicable premium for COBRA is really just the monthly insurance premium paid to the insurer. So you just kind of rely on the carrier in the fully insured context. For a self-insured plan, though, calculating that. 

00:31:54.690 - 00:31:56.880 

Chase Cannon: COBRA applicable premium. 

00:31:57.010 - 00:32:07.590 

Chase Cannon: is a little bit more challenging, and there's kind of two routes you can take. One is a reasonable actuarial estimate of future costs, so get your actuaries involved. 

00:32:09.000 - 00:32:23.499 

Chase Cannon: you may be able to check with your TPA on both of these, but past costs adjusted for changes in a cost of living index, that would be the other method. So one's kind of looking forward actuarially, one's kind of looking back at past costs and 

00:32:23.500 - 00:32:34.629 

Chase Cannon: making adjustments for cost of living. So, just a little bit different in how you do that. Again, sometimes TPAs can help with this, if not actuaries can help with this. 

00:32:34.690 - 00:32:53.769 

Chase Cannon: But there is a difference there, and there is responsibility on the employer's plan sponsor to make sure those premiums are being calculated correctly and, applied correctly. So that's an important distinction there. We wanted to include this note on HRAs, because those can be particularly challenging 

00:32:53.800 - 00:33:11.360 

Chase Cannon: Usually some… the same type of analysis of past costs, but just to note that COBRA beneficiaries are generally entitled to any additional accruals for the coverage period. So, just know that there's a little bit of additional stress and challenge when you're talking about 

00:33:11.650 - 00:33:13.520 

Chase Cannon: HRAs. 

00:33:14.220 - 00:33:33.020 

Chase Cannon: Some difficult or challenging parts or situations under COBRA where it makes a difference how you approach this fully versus self-insured. For both, though, to, again, level set when it comes to coordination and, approaching different 

00:33:33.070 - 00:33:43.870 

Chase Cannon: challenging situations, both the fully insured plan and self-insured plan would always want to coordinate with either the carrier or the stop-loss carrier. 

00:33:44.760 - 00:33:52.499 

Chase Cannon: So, and just generally speaking, we want to be on the same page always with either of those, with Cobra. 

00:33:53.060 - 00:34:00.800 

Chase Cannon: offering generally. We included some special situations here. One would be an extension of continuation benefits beyond 

00:34:00.920 - 00:34:04.150 

Chase Cannon: what federal or state COBRA requires. 

00:34:04.250 - 00:34:23.139 

Chase Cannon: So if you wanted to extend coverage beyond COBRA, or to individuals who may not be required to be covered under COBRA, such as a domestic partner, usually for a fully insured plan, you're going to be restricted by what the carrier says, right? Self-insured context, you have a little bit more flexibility. 

00:34:23.219 - 00:34:25.310 

Chase Cannon: You can go a little bit further. 

00:34:25.340 - 00:34:44.030 

Chase Cannon: In offering COBRA-like coverage to those not entitled to federal COBRA. Again, we're using that domestic partner example, but you're always going to want to make sure that the… that you're on the same page with the stop-loss carrier in that situation. So that's really important. 

00:34:44.080 - 00:34:48.539 

Chase Cannon: For denials of coverage, that's another situation that we see as special. 

00:34:48.690 - 00:35:02.350 

Chase Cannon: For example, you decide not to offer COBRA because of gross misconduct, that's technically allowed, you don't have to offer COBRA in that situation, but gross misconduct is a very high bar. We generally say, you know. 

00:35:02.700 - 00:35:17.980 

Chase Cannon: be very sure that you qualify that before you don't offer COBRA, but in either instance, making sure that you're on board and communicate directly and consistently with the carrier for fully insured plans and stop loss carrier for self-insured plans. 

00:35:18.320 - 00:35:28.589 

Chase Cannon: subsidizing COBRA. This is something we see a lot of under severance agreements, and usually severance agreements are enhanced, augmented, or only available to 

00:35:28.640 - 00:35:43.449 

Chase Cannon: those employees who were highly compensated, maybe executive or management type of employees, and so if you're going to subsidize COBRA, this raises an issue under what we call the Section 105 non-discrimination rules. We're going to go there deeper in just a sec. 

00:35:43.600 - 00:35:58.150 

Chase Cannon: But if the subsidies are higher for those highly compensated individuals, that can be problematic. Generally speaking, Carol mentioned earlier with the claims appeals, making exceptions, treating people differently under a plan. 

00:35:58.490 - 00:36:08.000 

Chase Cannon: Especially when it's a… it's a protected class, obviously. Somebody who's a high claimant, or a, 

00:36:08.550 - 00:36:19.509 

Chase Cannon: you know, disability, something like that, but also you're highly compensated. Anytime you're treating them differently, or both ways, including or excluding benefits. 

00:36:19.550 - 00:36:32.689 

Chase Cannon: or coverages, or subsidies, that's going to create non-discrimination issues. So in this context, and we'll talk about this in more depth here in a sec, it's really this, you cannot favor your highly compensated employees. So we'll circle back on that. 

00:36:32.950 - 00:36:42.440 

Chase Cannon: Hipaa is a huge deal, privacy and security requirements, and the list of items that you have to follow when you are self-insured. 

00:36:42.550 - 00:37:01.009 

Chase Cannon: And when I say self-insured, again, we're talking about health FSAs, HRAs, level funded. This is a big deal for HIPAA here. So, to begin with, HIPAA is the law that is… we all appreciate as employees, our employers with our information can't just go out and start selling our information. 

00:37:01.060 - 00:37:19.840 

Chase Cannon: And they've got to follow certain rules and safeguard our… what we call protected health information. That's information that kind of ties an individual's name to a health status, or condition, or… or medical disease, something like that. So, for a fully insured plan. 

00:37:20.040 - 00:37:31.519 

Chase Cannon: We use this term hands-off, and really that means you're not seeing anything except for enrollment or disenrollment information and de-identified, what we call, aggregated data. 

00:37:31.780 - 00:37:41.099 

Chase Cannon: If you're seeing just that, you're gonna be considered hands-off. If you're seeing more than that, you're gonna be considered hands-on, even if you're fully insured. 

00:37:41.180 - 00:37:46.340 

Chase Cannon: And you would have… you would essentially become what we would call a self-insured plan. 

00:37:46.360 - 00:37:56.139 

Chase Cannon: And you would have those additional HIPAA obligations. For a hands-off, fully insured employer, the list is still there. There's still some things you need to do 

00:37:56.140 - 00:38:08.319 

Chase Cannon: to check the box here under HIPAA, that includes limiting PHI access and running a risk analysis. This is really kind of with your internal IT team, trying to make sure there's no holes in the system where 

00:38:08.450 - 00:38:28.379 

Chase Cannon: PHI or anything else could inadvertently be exposed, and then confirming that you're not creating PHI, you're not receiving or transmitting PHI. Usually the carrier will communicate information to you, but it will be limited to that aggregated data or just simple enrollment, disenrollment information. 

00:38:29.210 - 00:38:35.760 

Chase Cannon: But checking to make sure that's the case. Developing and maintaining HIPAA authorizations for employees that contact HR 

00:38:35.810 - 00:38:50.449 

Chase Cannon: with questions, so making sure that you get that authorization from the employee that it's okay to discuss that issue. Another thing you could do here is just refer that individual to the carrier. Again, we're talking in the fully insured, kind of hands-off context here. 

00:38:50.520 - 00:38:59.490 

Chase Cannon: Educating workforce members is important, just so they understand at a high level what HIPAA is, what PHI is, and what they should and shouldn't be seeing. 

00:38:59.720 - 00:39:03.159 

Chase Cannon: Documenting compliance through this limited scope. 

00:39:03.220 - 00:39:21.319 

Chase Cannon: general policy. This is, really just pretty basic, but just having a policy that says you're not going to retaliate against employees who exercise HIPAA rights, or asking employees to waive these rights. So we think that should be done through a very simple documentation process, so that there's something formal there. 

00:39:21.580 - 00:39:40.029 

Chase Cannon: Making aware to your employees that there's a notice of privacy practices, the privacy of practices, that notice will be sent by the carrier, but just awareness of where that is. And then BAAs, these are the business associates agreements for those that are helping the plan through some type of service arrangement. 

00:39:41.390 - 00:39:49.769 

Chase Cannon: remember that FSAs and HRAs are self-insured plans, and they would require a BAA. So, in the fully insured context. 

00:39:50.120 - 00:40:04.790 

Chase Cannon: the carrier's generally going to handle the rest of the obligations. This looks like a hard list, but it's actually pretty simple, straightforward, not heavy, but if you become self-insured, and again, thinking about if you're right now considering whether to go from fully to self. 

00:40:04.850 - 00:40:11.390 

Chase Cannon: This is a big deal. There's a list of about 8… 7-8 things we're gonna talk about really quickly here. 

00:40:11.660 - 00:40:24.100 

Chase Cannon: that you have to do. The biggest one is gonna be this adoption of written privacy policies and procedures, providing the notice of privacy practices to participants, that becomes your responsibility. 

00:40:24.150 - 00:40:37.030 

Chase Cannon: entering into business associate agreements with everybody who's associated with the plan, which could include TPAs, PBMs, insurance brokers, again, to the extent their services involve the use or receipt of PHI. 

00:40:37.170 - 00:40:42.440 

Chase Cannon: You're gonna have to designate a HIPAA privacy and security officer to oversee 

00:40:42.570 - 00:40:57.110 

Chase Cannon: the plan's compliance efforts, and again, security policies and procedures have to be developed. Security and privacy, what's the difference there? Privacy is really what you can and can't do with the information. 

00:40:57.180 - 00:41:03.960 

Chase Cannon: And security is really the safeguarding of that information in electronic form. So we kind of live in that world now. 

00:41:04.420 - 00:41:18.060 

Chase Cannon: you've got to be able to work with your IT and tech teams to get the proper security policies and procedures in place. So much of this depends on what you're doing as an employer, and what is your risk for 

00:41:18.060 - 00:41:28.530 

Chase Cannon: your appetite for risk. If you have an employee base that is all on computers and always works through email and shares a lot of this information. 

00:41:28.610 - 00:41:34.510 

Chase Cannon: Your profile and the things that you're going to put in your security policies and procedures are going to be very different than a… 

00:41:34.620 - 00:41:49.260 

Chase Cannon: an environment where maybe you have truck drivers or your warehouse employees, and you're just not doing that much electronically. Most of us live in the electronic world, so the security policies and procedures are really, really important. 

00:41:49.350 - 00:42:05.699 

Chase Cannon: And then we won't go through it, but if you do have a breach, it's the requirements to notify in the event of breach are much bigger and more onerous for a self-insured plan. Always have to notify the impacted individuals. 

00:42:05.740 - 00:42:24.009 

Chase Cannon: But once you hit a certain level, you might have to tell HHS, meaning the federal government, and even the media in some instances. So, just be aware of those. You don't have to really memorize any of this, but this is the added list that comes into play. And when we're talking about it from a fiduciary perspective. 

00:42:24.160 - 00:42:35.349 

Chase Cannon: Understanding those additional requirements, particularly with the security and privacy policies and procedures, getting in touch with the right people within your organization. 

00:42:35.530 - 00:42:42.079 

Chase Cannon: Which includes, again, the IT and tech teams. You'll probably need somebody from the C-suite in there to talk.

00:42:42.110 - 00:43:01.830 

Chase Cannon: And be aware of this. Obviously, your HR and benefits people will need to be a part of that discussion, and maybe some others as well. So, this is one where it really takes that heightened fiduciary challenge and responsibility to get the right people in the room to make the right decisions and get the right policies and procedures. 

00:43:01.830 - 00:43:10.949 

Chase Cannon: And ultimately, it can go along with a lot of what you're trying to accomplish to try and protect, you know, your privacy policies anyway for non-health-related information. 

00:43:10.980 - 00:43:21.169 

Chase Cannon: You don't want people breaking into your systems anyway. It's just really heightened here under HIPAA because we have additional rules that relate to that protected health information. 

00:43:22.340 - 00:43:38.449 

Chase Cannon: So, with that, I'm going to move into ACA implications. Again, this is a different law now. ACA, what's the difference here when it comes to reporting? We wanted to highlight quickly the PCOR fee. This is something that, 

00:43:38.710 - 00:43:45.070 

Chase Cannon: makes a difference. You have to pay an additional fee. Most people most employers who have 

00:43:45.170 - 00:43:59.360 

Chase Cannon: a self-insured plan, and that includes an HRA in this context, you have to file a form, it's Form 720, with the IRS and pay that fee. This one's kind of oddly timed with this October 1st 

00:43:59.370 - 00:44:10.429 

Chase Cannon: date, during a year, and based on the end of the plan year, your rate might be different if the end of the plan year is before or after October 1st of a year. 

00:44:10.540 - 00:44:19.349 

Chase Cannon: This one was also supposed to go away in 2019, and Congress brought it back for 10 more years, so we're doing this until 2029. 

00:44:19.830 - 00:44:25.910 

Chase Cannon: For fully insured plans, no problem here, the insurer, the carrier is responsible for that.

00:44:26.070 - 00:44:37.329 

Chase Cannon: But really just, if you're switching to self-insured, this is an added fee you're gonna have to pay. If you're adding an HRA, that would be an additional fee you would have to pay, so… 

00:44:37.380 - 00:44:47.299 

Chase Cannon: Don't forget the HRAs when you're in a fully insured arrangement. And then, reporting. We all love the 1094, 1095-C forms, self-insured plans. 

00:44:47.360 - 00:44:58.409 

Chase Cannon: have this additional responsibility to report on covered individuals. And so, in the self-insured plan context, you have to complete 

00:44:58.410 - 00:45:10.090 

Chase Cannon: Parts 1, 2, and 3 of Form 1095-C, and that Part 3 is really reporting on the covered individuals. If you're fully insured, you only have to complete Parts 1 and 2 of Form 1095-C. 

00:45:10.130 - 00:45:12.500 

Chase Cannon: That's the employer mandate requirement. 

00:45:12.560 - 00:45:26.170 

Chase Cannon: If you're under, you know, less than 50, and you don't have that employer mandate, but you're self-insuring, you do have to report that minimum essential coverage. So you have an option to use Forms 1094 and 95B in that instance. 

00:45:26.600 - 00:45:44.350 

Chase Cannon: And then a reminder that most of these filings need to be done electronically now. So those are some little differences on the ACA. I mentioned non-discrimination. I just want to highlight this again. This is a big difference when… between fully insured and self-insured plans. 

00:45:44.510 - 00:45:46.649 

Chase Cannon: Fully insured plans. 

00:45:46.810 - 00:46:00.120 

Chase Cannon: Most employers allow their employees to pay premiums or contributions pre-tax via the employer's cafeteria or Section 125 plan. That means Section 125 non-discrimination testing is in play. 

00:46:00.460 - 00:46:06.080 

Chase Cannon: Fully insured plans are not subject to Section 105 non-discrimination tests, though. 

00:46:06.260 - 00:46:22.859 

Chase Cannon: Self-insured plans kind of have both of those in play, 125 and 105. What are those numbers and sections? That's really just the section of the Internal Revenue Code that gives you the tax advantages that you get from offering these plans. You don't have to pay… employees don't have to pay. 

00:46:23.090 - 00:46:34.729 

Chase Cannon: tax on the benefits received, and can make some of these contributions pre-tax. But this is one of the strings attached to that, is this… these non-discrimination rules that basically say. 

00:46:34.730 - 00:46:45.170 

Chase Cannon: You can't have a plan design that somehow favors highly compensated employees, so watch out for variances in contributions, benefits, eligibility, and waiting periods. 

00:46:45.220 - 00:46:49.500 

Chase Cannon: That's really where, when you have those variances, it's kind of what you need to watch out for. 

00:46:50.020 - 00:47:07.359 

Chase Cannon: Two things, we're going to kind of look at 125 versus 105 really quickly, but both of them kind of allow that variance based on what we call a bona fide business class, which means you can't… you need some business justification for the variance that you're suggesting, or the difference that you're suggesting. 

00:47:08.150 - 00:47:15.230 

Chase Cannon: If you can make a business case for it, it's probably fine. Some of those business cases or classifications would be geographic region. 

00:47:15.350 - 00:47:19.850 

Chase Cannon: Occupation, job title, hourly versus salary position. 

00:47:19.910 - 00:47:22.279 

Chase Cannon: If your positions are more based on 

00:47:22.290 - 00:47:25.339 

Chase Cannon: The names of people, or… 

00:47:25.350 - 00:47:38.110 

Chase Cannon: very specific, just names of people you like in the company, or it's based on management, or supervisory roles. That's where you might run into trouble, and the reason is, is that the outcome 

00:47:38.110 - 00:47:50.359 

Chase Cannon: of that variance cannot favor the highly compensated or key employees. We're focusing on HCE as our term here, highly comped employee. That's one difference between 125 and 105. 

00:47:50.620 - 00:47:55.230 

Chase Cannon: Under $125, we have this $155,000. 

00:47:55.450 - 00:48:08.869 

Chase Cannon: threshold, kind of keep that in your head. If somebody's making more than $155,000, this goes up to $160,000 next year. That's a highly compensated employee. If they're an officer or a more than 5% owner. 

00:48:09.160 - 00:48:16.360 

Chase Cannon: they could also be a highly comp. So, really what we're looking for is, is your group, or your difference, your classification. 

00:48:16.390 - 00:48:35.649 

Chase Cannon: Is it going to contain a high concentration of those HCEs or key employees? I have that definition here as well. That's where you're going to have some challenges. 105 is the same concept, it's just that the definition of HCE is different, and it's really focused on 

00:48:35.910 - 00:48:49.260 

Chase Cannon: this top 25% of all employees looking at compensation. So, those are really the things to… to look at, and again, these… these non-discrimination rules, that addition of Section 105, 

00:48:49.260 - 00:49:00.000 

Chase Cannon: Does restrict a little bit more what a self-insured plan can do, and at the very least, adds an additional layer of consideration when you're talking about your benefits designs. 

00:49:00.040 - 00:49:16.090 

Chase Cannon: Under both of those sets of rules, if you fail that, if you do have an arrangement that's somehow favoring your highly compensated, the result is really taxation to those highly compensated employees. We call that taxation on excess reimbursements here under 105. 

00:49:16.100 - 00:49:32.649 

Chase Cannon: But the basic idea is you're going to have to have some difficult conversations with your highly comped employees. They're going to have a little bit of extra tax to pay. And again, all of this, going back to what we're talking about with fiduciary governance, why are we going through this? It's really just to focus you, again, on… 

00:49:32.700 - 00:49:45.180 

Chase Cannon: the importance of understanding the difference of how some of these rules… we just went through ACA, COBRA, we're gonna go to transparency. Understanding all of those and the heightened… 

00:49:45.320 - 00:49:52.740 

Chase Cannon: rules or obligations that you have when you go from fully to self-insured. So important to understand. 

00:49:52.840 - 00:49:59.609 

Chase Cannon: And to be able to apply as you're administering or overseeing somebody who's administering the plan. 

00:49:59.680 - 00:50:08.209 

Chase Cannon: This last slide really is just a couple steps to take. I'm not going to go through it, but it's just kind of for your takeaway on what you can do 

00:50:08.270 - 00:50:23.449 

Chase Cannon: for, self-insured under 105, what are the things to look for when it comes to these tests, and figuring out to make sure that you're not favoring your highly compensated? So with that, I'm gonna flip it back to Carol, who I think has the most challenging part of this presentation. 

00:50:23.620 - 00:50:28.909 

Chase Cannon: Because it's about transparency obligations. Transparency is such a new concept. 

00:50:29.030 - 00:50:44.979 

Chase Cannon: And, not necessarily a new concept, but new in how it applies, and, is really challenging, mostly coming out of our most recent legislation in 2021. So, Carol, do you want to walk us through transparency, which is kind of our last section of law here? 

00:50:44.980 - 00:51:00.979 

Carol Wood: Sure, yes, I'd be happy to, and you know, I love to talk transparency, but thanks for that great overview on so many laws. You cover a lot of ground there. You know, I think HIPAA is an area where, you know, employers, you know, really appreciate the information. 

00:51:00.980 - 00:51:09.100 

Carol Wood: And the non-discrimination testing you just covered, we received so many questions related to non-discrimination. 

00:51:09.170 - 00:51:24.789 

Carol Wood: It's just, you know, employers are constantly looking to vary benefits, contributions, etc. So, a lot of important stuff there. But yes, transparency, transparency is really a focus, today, and… 

00:51:24.810 - 00:51:31.699 

Carol Wood: How do these transparency laws affect the obligations of fully insured and self-insured plan sponsors? 

00:51:31.830 - 00:51:47.989 

Carol Wood: We have… and when we say transparency laws, I'm referring to the Transparency and Coverage Final Rule and the Consolidated Appropriations Act of 2021, which impose significant new and ongoing obligations on both fully insured and self-insured plans. 

00:51:48.090 - 00:51:53.740 

Carol Wood: And we know these laws were designed to enable plans and participants 

00:51:53.740 - 00:52:08.860 

Carol Wood: to have the information they need regarding healthcare pricing, so they could make informed decisions regarding their plan benefits. There were some other goals, too. Prevent surprise billing, improve access to mental health benefits. 

00:52:09.710 - 00:52:28.489 

Carol Wood: Generally, there's a, you know, an overall scheme here. Generally, a fully insured plan can contract with the carrier, who's also subject to almost all of these requirements to fulfill their obligations for the plan, and can even contractually assume liability for a compliance failure. 

00:52:28.550 - 00:52:44.419 

Carol Wood: In contrast, the self-insured plan can contract with the TPA to assist with fulfilling the requirements, but remains ultimately responsible for compliance. So that's really the big difference. I mean, in either way, you want to have a written contract. 

00:52:44.420 - 00:53:03.950 

Carol Wood: But regardless of that contract, as far as, you know, the federal regulators are concerned, with a self-insured plan, you're always going to be ultimately responsible for compliance. In both cases, significant interaction with the carrier or TPA is needed to ensure applicable deadlines and requirements are met. 

00:53:03.950 - 00:53:04.890 

Carol Wood: Next slide. 

00:53:09.210 - 00:53:28.949 

Carol Wood: Alright, so one of the requirements I've been talking about? Don't worry, I will not go through all of these, but you can see it's quite an extensive list, right? The transparency and coverage rule, we have our machine-readable files, we're expecting guidance on the prescription drug file, that's never even been enforced, so that's, we should get news on that, hopefully, soon. 

00:53:28.950 - 00:53:35.939 

Carol Wood: The internet self-service tool for participants. We have the No Surprises Act to protect against surprise billing. 

00:53:35.940 - 00:53:46.649 

Carol Wood: And then the other title that's under the Consolidated Appropriations Act is Transparency, which brings us our gag clause requirements, the mental health parity. 

00:53:46.710 - 00:53:56.229 

Carol Wood: non-quantitative, you know, written analysis requirement. The… Service Provider Compensation disclosures. 

00:53:56.380 - 00:54:13.569 

Carol Wood: On that, also, we're expecting guidance, next… next month, really, particularly relating to, pharmacy benefit manager disclosures, and then also the RXDC reporting. So a lot of… a lot of requirements, a lot of new obligations. 

00:54:13.940 - 00:54:14.940 

Carol Wood: Next slide. 

00:54:15.760 - 00:54:25.959 

Carol Wood: Why is transparency so important for group health plan sponsors? We know that they need to ensure as plan fiduciary, that the assets are 

00:54:26.030 - 00:54:38.510 

Carol Wood: administered prudently and the sole interest of participants. They have to carefully select and monitor their service providers and verify that the service provider's compensation is reasonable. 

00:54:38.510 - 00:54:50.030 

Carol Wood: And they need access to the healthcare costs, claims data, service provider compensation in order to fulfill these obligations. And of course, it's particularly important, as part for both fully insured and self-insured plans. 

00:54:50.030 - 00:55:01.550 

Carol Wood: But self-insured plans, again, are assuming greater discretionary authority, financial responsibility, and obligations with respect to the plan and plan assets. And we see the recent litigation 

00:55:01.550 - 00:55:12.740 

Carol Wood: targeting employers, self-insured plan sponsors, for failing to fulfill these duties. The Trump administration also, I'd point out, has signaled that price transparency is a priority. 

00:55:12.740 - 00:55:22.549 

Carol Wood: We're expecting to see guidance, so where we have a largely deregulatory administration, transparency is a focus, so employers really need to stay tuned. 

00:55:25.420 - 00:55:44.200 

Carol Wood: And key takeaways here, you know, just really make sure employers that they're fulfilling the requirements, evaluating those service rider compensation disclosures, monitoring for guidance, and for litigation, and, you know, expect more laws in this area. 

00:55:46.490 - 00:55:51.250 

Chase Cannon: Yeah, such a quickly developing area, right? And also just a little bit of a

00:55:51.590 - 00:55:59.539 

Chase Cannon: I kind of call it an awkward love triangle that is a result of these laws, like the employer's being asked to do things, being asked to do

00:55:59.660 - 00:56:08.400 

Chase Cannon: access or post or share information that only the carrier or TPA has, and then we as the broker are trying to support on that, but don't always have 

00:56:08.520 - 00:56:22.200 

Chase Cannon: you know, don't have the information either, and so it just becomes… it's a big challenge, and it's a tough spot that the laws have put these… put employers, our audience on this call today, in under these transparency rules, but this is a great… 

00:56:22.200 - 00:56:23.000 

Carol Wood: True. 

00:56:23.000 - 00:56:23.330 

Chase Cannon: Yeah.

00:56:23.330 - 00:56:29.219 

Carol Wood: Very true, and the regulators don't have direct enforcement over TPAs, right? So it's a lot of their.

00:56:29.220 - 00:56:29.660 

Chase Cannon: enforcement. 

00:56:29.660 - 00:56:36.819 

Carol Wood: If it's the self-insured plan sponsor, even though the laws are really aimed at helping the plan sponsor. 

00:56:38.110 - 00:56:42.680 

Chase Cannon: Right, and so much of this information can be really helpful when we're talking about the… 

00:56:42.830 - 00:56:48.079 

Chase Cannon: Fiduciary obligation when it comes to controlling costs, getting better benefits, you know, making things 

00:56:48.340 - 00:56:54.670 

Chase Cannon: More easy to access, price information's a big part of that, and so, yeah, a lot of this information can be really helpful as… 

00:56:54.870 - 00:56:58.339 

Chase Cannon: For employers in satisfying their fiduciary duties. 

00:56:58.340 - 00:57:02.650 

Carol Wood: Hopefully we'll see those lower prices, right? I'm not sure if a lot of employers are seeing those, but hopefully we'll 

00:57:02.990 - 00:57:07.189 

Carol Wood: You know, I'm like, Carol, what do you mean? You know, this, this, you know, the. 

00:57:07.190 - 00:57:07.720 

Chase Cannon: Awesome. 

00:57:07.720 - 00:57:11.390 

Carol Wood: achieve, but hopefully we'll… we'll see some results over time. 

00:57:11.390 - 00:57:13.870 

Chase Cannon: Yeah, sometimes feels like the, 

00:57:15.270 - 00:57:20.640 

Chase Cannon: Yeah, the wizard behind the curtain, right? Like, what is that thing called. 

00:57:21.480 - 00:57:24.659 

Chase Cannon: Affordability or or cheaper prices. 

00:57:25.170 - 00:57:34.830 

Chase Cannon: Okay, so we are at the end of our time here, basically, but we just had a couple more slides talking about some takeaways, and then some NFP resources. 

00:57:35.030 - 00:57:42.879 

Chase Cannon: So again, want to highlight a couple of points here. Both fully and self-insured plans really have fiduciary obligations. 

00:57:43.190 - 00:57:47.369 

Chase Cannon: And, but the transition from fully to self-insured 

00:57:47.530 - 00:57:53.110 

Chase Cannon: Or, if you're just already self-insured, you're gonna have more stuff, right? That's the bottom line. 

00:57:53.350 - 00:57:57.530 

Chase Cannon: But you do have more design flexibility, potential financial advantages. 

00:57:57.640 - 00:58:04.599 

Chase Cannon: But those fiduciary obligations go up, there's more to comply with, there's bigger considerations to follow. 

00:58:04.690 - 00:58:18.199 

Chase Cannon: there's more chance of, litigation and all of that. So, understanding the financial risks, the compliance considerations in becoming full insured or staying full… sorry, becoming self-insured or becoming fully insured. 

00:58:18.770 - 00:58:27.789 

Chase Cannon: Re-highlighting, not on this slide, but health FSAs, HRAs, generally considered self-insured, right? And so, 

00:58:28.400 - 00:58:43.490 

Chase Cannon: You're gonna have those heightened obligations, you're likely to engage service providers to fulfill certain obligations, but remember, that's not the end of it. We've talked about this on past calls. Our last call, I think, was all about selecting and monitoring service providers, so… 

00:58:43.490 - 00:58:50.349 

Chase Cannon: The selection is one part, the monitoring is a different part, remembering that that's there. 

00:58:50.450 - 00:58:58.760 

Chase Cannon: Service contracts sufficiently addressing ongoing benefits compliance obligations, that's an important part of that, too, where you're engaging a service provider.

00:58:59.430 - 00:59:18.760 

Chase Cannon: Staying on top of this, we will do our best, and have done our best in covering developments. We'll include that in our Compliance Corner newsletter. If you're not getting that directly as an NFP client, we also post it on our NFP.com website. I mentioned that under our Insights tab there. 

00:59:19.070 - 00:59:31.899 

Chase Cannon: So go check that out, that's a great way to follow what is changing. And then, a reminder that we have, from the start, had this really helpful toolkit, and other publications. 

00:59:32.090 - 00:59:51.640 

Chase Cannon: that really go back to the basics on fiduciary governance, right? Over the course of our four webinars here, we've focused on different aspects of the fiduciary governance program and rules. And so, taking it back to the beginning, we released this toolkit and publication 

00:59:51.740 - 00:59:57.750 

Chase Cannon: In the toolkit, we have a publication, we have some PowerPoint slides, we have, 

00:59:57.860 - 01:00:08.409 

Chase Cannon: kind of an overview and checklist. What you're looking at here on the slide with Appendix A is a checklist that you can follow when it comes to putting in your governance program. 

01:00:08.640 - 01:00:12.549 

Chase Cannon: Establishing, documents and processes. 

01:00:12.740 - 01:00:28.599 

Chase Cannon: So if you do not have this, publication, reach out to your NFP contact, and they can get it for you. We have additional publications on lots… all of the stuff that we've talked about today. The HIPAA Privacy and Security, we're releasing that in the next couple weeks. 

01:00:28.720 - 01:00:42.920 

Chase Cannon: But ERISA, ACA, COBRA, the non-discrimination, transparency, PCOR, all of this is so overwhelming, I know, but we have resources, publications that go through it step by step and can really help hold your hand through some of this stuff. 

01:00:43.150 - 01:00:51.709 

Chase Cannon: So, thank you so much for joining us. I'm gonna flip it, and thank you, Carol. It's been a pleasure doing today's presentation and the whole webinar series with you. 

01:00:51.830 - 01:00:58.990 

Chase Cannon: But thanks to our audience for tuning in, and I'm gonna flip it back over to Amber to close this out. 

01:00:59.980 - 01:01:08.649 

Amber Posthauer: All right. Thank you, Carol and Chase, for sharing your valuable time and expertise with us today. To reiterate, today's presentation was recorded. 

01:01:08.650 - 01:01:20.920 

Amber Posthauer: We'll be sharing the recording in the follow-up email and on the NFP website. If there are any portions of this call that you missed, by Monday, you'll receive an email with a link to the full recording. The PowerPoint slides used in this presentation will be shared in the same email. 

01:01:21.240 - 01:01:32.960 

Amber Posthauer: At the end of this call, a survey will populate in a new window. Please take a brief moment to complete the survey, as it lets us know what topics are important to our listeners, and helps make our education program as current and relevant as possible. 

01:01:33.070 - 01:01:38.079 

Amber Posthauer: That concludes our webinar for today. Thank you, everyone, for joining us, and have a great day!