Managing Increasing Health and Welfare Fiduciary Risks

[...]health and welfare plan fiduciary governance tends to be less formal than in the retirement plan context. Lo establish a health and welfare plan fiduciary committee, plan fiduciaries should work with counsel to create a charter (or expand an existing charter) to set forth the responsibilities of the committee. these responsibilities could include: o Collecting and evaluating broker/ consultant fee disclosures; o Monitoring medical plan service providers, including performance guarantee assessments; o Conducting and evaluating the results of independent claims audits and contract compliance reviews; o Monitoring pharmacy benefit managers and related service providers, including performance guarantee assessments, discount and minimum rebate guarantee reconciliation, independent claims audits, and contract compliance reviews; o Conducting periodic requests for proposals to ensure that the scope of services, fees, network discounts, and pharmacy benefit manager pricing remain competitive; o Monitoring compliance with law and directing service providers to make adjustments as needed; o Managing government investigations; o Addressing other miscellaneous matters, such as producing participant Communications, handling participant or healthcare provider disputes, and managing health plan litigation. What's the Impact? o Plaintiffs' firms are actively looking for potential employee plaintiffs who participate in group health plans. o In addition to civil litigation, the DOL has increased its investigation activity in the health plan arena. o Manage risks by establishing a health and welfare plan fiduciary committee to conduct formal, well-documented processes to monitor health plan activities and service provider performance and fees.