Group Health..................................

[leevena]

Scagnt83, sorry I have been busy over the past week or so. I should have been more a little more clear in my response when I mentioned that you may be confusing this with the employer's fiduciary responsibility. Since the original question was focused on a small, presumably fully insured group, I was answering within that context.

A fully-insured medical plan has a Plan Sponsor, usually the employer. The fiduciary for fully insured group is the carrier, not the employer/plan sponsor. The fiduciary for a plan that is self-funded is usually the employer, or some designate of the employer. This is what I was referring to in my statement about confusing it with the employer's fiduciary responsibility. So in a self-funded plan all that you have spoken about is true, but not in a fully-insured.

I do still disagree with your statement requiring shopping of the market, in a very literal sense. As I read your statement, it communicates the need for an actual shopping every year, which is not required.

Please do not take any of this personally; I was not trying to offend you in any way. Must say I am impressed with the depth of your research in your reply.

 

[scagnt83]

Lee, dont worry I dont take any of this personally. Just a professional difference of opinions. What you posted is technically correct as written in ERISA, but not correct in how the DOL and courts have interpreted and applied that language.

Also, I did not mean to imply that a Plan Sponsor is required to shop the market on a yearly basis. But they are expected by the DOL to monitor and review service providers at "reasonable intervals". As outlined by the link I provided:

Monitoring A Service Provider
An employer should establish and follow a formal review process at reasonable intervals to decide if it wants to continue using the current service providers or look for replacements. When monitoring service providers, actions to ensure they are performing the agreed-upon services include:
Reviewing the service providers' performance;
Reading any reports they provide;
Checking actual fees charged;
Asking about policies and practices (such as a TPA's claims processing systems);
Ensuring that plan records are properly maintained; and
Following up on participant complaints.

I work the Qualified Plan market a good bit. So Fiduciary Duty under ERISA is something I deal with on a daily basis. I do realize that there are small differences between Benefits Plans and Retirement Plans... but not that much.

One recurring theme that has evolved is that the act of hiring a Fiduciary is a Fiduciary function in and of itself.

It is referenced in the best practices outlined by the DOL in this phrase:

Hiring A Service Provider
Hiring a service provider in and of itself is a fiduciary function. When considering prospective service providers, provide each of them with complete and identical information about the plan and what services you are looking for so that you can make a meaningful comparison.

Another related recurring theme is that a Fiduciary Duty does not just apply to named Fiduciaries. Fiduciary is a function/role or an "act", and is not limited to just a title. Making the decision about who will be the Named Fiduciary is a Fiduciary Act.

This is also referenced in the link I provided:

Using discretion in administering and managing a plan or controlling the plan's assets makes that person a fiduciary to the extent of that discretion or control. Thus, fiduciary status is based on the functions performed for the plan, not just a person's title.

Now how much more discretion and control can you have than control over the Named Fiduciary?

A Plan Sponsor can offset Fiduciary responsibilities, but they are never totally absolved of those responsibilities, even when they have hired a Named Fiduciary. If a person or entity has the discretion to make a change to the admin or assets; when they exercise that control they are acting in a Fiduciary capacity and bound by the due diligence of a Fiduciary under ERISA.

 

[leevena]

Glad you do not take it personally.

I believe the disconnect has to do with the differences between insured and self-funded. Yes it is true that there are minor differences between retirement and self funded, but not with insured medical. By and large, the erisa requirements for fully insured focus on the commincation to particpants requirements.

Your highlighted section (monitoring a service provider) contains a very significant error. If you go to the dol faq (www.dol.gov/ebsa/faq-atp.html) you will find the citation you provided, but instead of using "employer" it uses "fiduciary" as the responsible party. I could not find your citation. And, as I stated earlier, the fiduciary for an insured plan is the carrier. As a side note, some of the level-premium, self-funded plans do not allow the employer to be the fiduciary.

Your second highlighted "using discretion in administration..." is correct for self funding, not insured. The employer who purchases an insured plan cannot tell the carrier which vendor to use, which claims are to ne paid or not paid, and cannot name a fiduciary.

Your comment earlier that technically I was correct, but due to changes due to court case, interpretation, etc., does not hold true. Any of these changes or interpretations would be incorporated into the dol website, such as the faq I referenced above.

 

[scagnt83]

All of my points go back to the fact that the hiring of a fiduciary is a fiduciary act. Therefore anyone who hires a fiduciary must take the prudence of a fiduciary during that hiring process. When it comes to various service providers and whatnot that the carrier uses, no the sponsor is not a fiduciary or acting as a fiduciary in that capacity. But in the capacity of choosing who the fiduciary will be, they are acting as a fiduciary.

 

[leevena]

I understand what you are saying, but that issue is for retirement/pensions and not insured health. Please see Section 408(b), which does not apply to health.

 

[bill3173]

Guardian has a great package of supplemental benefits. So does Assurity, Ameritas, & Mutual of Omaha. I like Guardian's online enrollment tools, they also give discounts based on how many products the group has with them.

What do you think of Transamerica's voluntary benefits? I just placed a small group (75 FT emps/25 Pt), and the employer wants me to replace their current voluntary benes and consolidate to 1 carrier (right now he's paying 3 cos.)

I've never pursued voluntary, but I reviewed the TA stuff, compared products/prices, and it looks good. I mentioned TA and he jumped on it, he currently has life with them, but curious as to what people seasoned in this market thought.

 

[scagnt83]

What do you think of Transamerica's voluntary benefits? I just placed a small group (75 FT emps/25 Pt), and the employer wants me to replace their current voluntary benes and consolidate to 1 carrier (right now he's paying 3 cos.)

I've never pursued voluntary, but I reviewed the TA stuff, compared products/prices, and it looks good. I mentioned TA and he jumped on it, he currently has life with them, but curious as to what people seasoned in this market thought.

I have never encountered them before to be honest. I have heard that they are competitive though, so it would definitely be worth getting a quote from them. They are very active in the group supplemental market and I hear about them a good bit. In the 401k world their 401k products are fairly competitive.

I would suggest to him that you get him 2 quotes and he decides which he likes better. Get one from Trans and another from Guardian, let him decide. It is not that hard to get benefits quotes, just get the employee census and talk to your regional sales rep about various options and features.

I dont know if you do business with Trans already, but I just recently placed my first individual case with them and it was the biggest PITA ever. It was my first and will likely be my last time doing business with Trans (NA is getting to be that way very quickly at the pace they are on). Guardian on the other hand I have had excellent experiences working with them.


Also, Guardian has some other "fringe" type benefits built in if you have multiple products with them. 3 or more products and the business gets an "employee assistance program". This gives employees access to legal counseling, mental health counseling, family counseling & planning assistance, etc. This is no extra cost for the business or employees. All you have to do is have 3 benefits with Guardian and the group qualifies.

They also offer an absence management program for groups that have group DI through them, again its free of charge.

So I am a bit biased towards Guardian a bit probably. But even on price alone they are extremely competitive when you are bundling multiple products with them. I suggest you get quotes from both and let the owner decide which to choose.

 

[Jack B]

I have never encountered them before to be honest. I have heard that they are competitive though, so it would definitely be worth getting a quote from them. They are very active in the group supplemental market and I hear about them a good bit. In the 401k world their 401k products are fairly competitive. I would suggest to him that you get him 2 quotes and he decides which he likes better. Get one from Trans and another from Guardian, let him decide. It is not that hard to get benefits quotes, just get the employee census and talk to your regional sales rep about various options and features. I dont know if you do business with Trans already, but I just recently placed my first individual case with them and it was the biggest PITA ever. It was my first and will likely be my last time doing business with Trans (NA is getting to be that way very quickly at the pace they are on). Guardian on the other hand I have had excellent experiences working with them. Also, Guardian has some other "fringe" type benefits built in if you have multiple products with them. 3 or more products and the business gets an "employee assistance program". This gives employees access to legal counseling, mental health counseling, family counseling & planning assistance, etc. This is no extra cost for the business or employees. All you have to do is have 3 benefits with Guardian and the group qualifies. They also offer an absence management program for groups that have group DI through them, again its free of charge. So I am a bit biased towards Guardian a bit probably. But even on price alone they are extremely competitive when you are bundling multiple products with them. I suggest you get quotes from both and let the owner decide which to choose.

With transamerica every dept, is different in the way it runs, traditional individual insurance is a disaster to get issued, I use them for final expense totally different.