1. The Law Offices of Sheila Deselich Cohen

2. Generally subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Two main types of plans: fully-insured (also subject to state law insurance provisions) self-funded (not subject to state insurance laws)

3. The “person” specifically designated in the Plan document. The term “person” is defined broadly and may refer to an individual, committee, corporate entity, or employee organization. If not specified, defaults to the plan sponsor (e.g., the employer of a single-employer plan; an employee organization; the board of trustees of a multi-employer plan).

4. Responsible for administering the plan. Bears the ultimate responsibility for legal compliance. Liable for statutory penalties. Is the proper defendant in suits involving benefit claims.

5. The Plan Administrator is always a plan fiduciary.

6. A person is a plan fiduciary to the extent that person: exercises discretionary authority or discretionary control with respect to the management of the plan; renders investment advice for a fee in connection with the plan; or has any discretionary authority or discretionary responsibility in the administration of the plan. Thus, a plan may have more than one plan fiduciary.

7. Act prudently and in accordance with the plan document. Discharge duties with respect to the plan solely in the interest of the participants and beneficiaries for the exclusive purposes of: providing benefits to participants and beneficiaries; and defraying reasonable expenses of administering the plan.

8. Examples: Third Party Administrators (TPAs) Independent Review Organizations (IROs)

9. Expertise Technology Consistency in administration Offer access to other vendors Can obtain more favorable rates

10. Allows for more focus on plan design and less focus on internal staffing for the plan.

11. Selection of the TPA is a fiduciary function. Thus, the plan administrator must conduct due diligence that includes: identifying potential candidates researching potential candidates evaluating potential candidates documenting the selection process

12. Considerations workforce capabilities and expertise technological resources business stability accountability accessibility responsiveness

13. Written Agreement should be negotiated should be reviewed by benefits counsel should address expectations and intentions, including: ● the term ● termination ●termination obligations ● liability provisions ● responsibilities of the parties

14. ●the standard of care ●indemnification ●particular services ●the handling of disputes ●technology to be used ●confidentiality provisions ●HIPAA privacy and security protections ●record maintenance and retention ●etc.

15. Monitoring the performance of the TPA is a fiduciary function. Approaches conducting audits determining compliance with performance standards (measure timeliness, accuracy, customer service) meeting periodically to address plan operations reporting by the TPA Document findings.

16. The plan administrator is ultimately responsible if the delegated functions are not discharged properly. Certain statutory responsibilities cannot be contracted away.

17. Examples: distribution of Summary Plan Descriptions (SPDs), Summaries of Material Modifications (SMMs), Summary Annual Reports (SARs), Summaries of Benefits and Coverage (SBCs) providing COBRA notices providing certificates of creditable coverage maintaining plan records Filing Form 5500 documentation determining whether orders meet the Qualified Medical Child Support Order (QMCSO) requirements

18. Negotiate the indemnification, standard of care, and limitation of liability provisions within the service agreement. Require errors and omissions/professional liability insurance and obtain proof of insurance. Require ERISA fidelity bonding to protect against theft and fraud and obtain proof of the bond.

19. Procure fiduciary liability insurance for the Plan Administrator. Require the TPA to obtain fiduciary liability insurance and request proof of insurance.

20. Mandated outsourcing of external claims review under the Patient Protection and Affordable Care Act. Must engage three IROs by July 1, 2012 (two by January 1, 2012). When using a TPA to secure IROs, the Plan Administrator should ensure that IRO agreements are actually in place.

21. When contracting directly with an IRO, be sure to include all required terms imposed under the Dept. of Labor’s Technical Releases. Determinations made by the IRO that require medical judgment trigger fiduciary status.

22. The Law Offices of Sheila Deselich Cohen Office 740.917.5155 Mobile 614.425.2013 sdcohen@columbus.rr.com