Managing your company's group health plan involves a complex set of responsibilities – and right now, the compliance landscape is evolving in ways that are likely to impact every Plan Sponsor.
Recent and pending legislation signal a clear move toward greater transparency in drug coverage costs, disclosure of partnerships, the options available to employers, and visibility into the fees paid across the benefits ecosystem. The working hypothesis is that these new rules will ultimately require insurers, brokers, and other partners to be more open.
What does all this mean for your organization? It means that arming yourself with strong fiduciary processes and expert guidance is more important than ever – regardless of exactly when and how these anticipated requirements take shape. Check out our recent webinar on the subject for more information.
With the introduction of the Consolidated Appropriations Act (CAA) in 2021, the stage was set for increased scrutiny and elevated standards in group health plan management. While many of the transparency-focused measures are still coming into focus, there’s broad agreement that stricter fiduciary duties – long associated with retirement plans – are starting to extend into the health benefits space.
This evolution can pose challenges: many Plan Sponsors, brokers, and vendors have not historically navigated fiduciary roles in the context of health benefits. But the core takeaway is clear and relevant, even as regulations continue to evolve: acting in the best interest of your plan participants, ensuring fees and partnerships are reasonable, and thoroughly documenting your process are now essential pillars of effective plan governance.
Given the uncertainty and lack of concrete regulatory enforcement details, a proactive strategy will serve you well. By adopting practices now that prioritize transparency, accountability, and documentation, you’ll be prepared for whatever formal requirements may come next – and you’ll be providing immediate value to your organization and employees.
Now is the time to establish a clear fiduciary process for your health plan – one that mirrors best practices from the retirement plan world. By forming a dedicated benefits committee, training members around fiduciary responsibilities, and putting your commitments in writing, you lay a strong foundation for confident, compliant decision-making. This step creates a sense of ownership and accountability across your team while reassuring employees that their best interests are always front and center.
Regardless of how the rules evolve, documentation is your best defense. We recommend adopting an ERISA-style approach to recordkeeping for your health plans, maintaining a comprehensive "fiduciary file" that details committee meeting minutes, provider reviews, and broker compensation disclosures. This level of transparency makes it easy to demonstrate the rationale behind your choices – especially as the expectation grows for employers to know exactly what their vendors are paid and why.
Rather than taking a siloed approach, consider standardizing your fiduciary standards across all benefit offerings. When you handle health, retirement, and ancillary benefits using one clear, consistent process – supported by well-documented decisions and transparent vendor evaluations – you build a benefits program that’s easier to manage, easier to explain, and easier for your people to appreciate.
When facing a shifting regulatory environment, the choice of partner has never been more important. Sentinel Group is uniquely positioned to help you excel in this moment of change. With a long-standing track record as fiduciaries in the retirement plan space – and deep experience in brokerage and consulting – we’re already built for the coming era of group health compliance. Our processes, documentation, and commitment to client interests place us at the forefront of this evolving landscape.
While many in the industry are just now learning to navigate fiduciary principles for health benefits, it’s already part of our DNA. We welcome the anticipated push for increased transparency and are fully prepared to help you thrive, whatever direction compliance trends ultimately take.
Choosing a partner with proven fiduciary expertise means you’ll have guidance you can trust, compliance support you can count on, and a benefits strategy that works for your business, your people, and your peace of mind.
By embracing these best practices now, you’re not just preparing for new rules – you’re building a program that stands out for its integrity, efficiency, and employee focus. Contact us to learn more.
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