That next wave of fiduciary litigation seems to be expanding, based on social media outreach by the law firm of Schlichter Bogard.
The litigation’s basis is found in the provisions of the innocuously labeled Consolidated Appropriations Act of 2021 (CAA)—provisions said by some to be “the most significant compliance challenge employers have faced since the Affordable Care Act.”
In essence, ERISA Section 408(b)(2)—which greatly expanded fee disclosure responsibilities for retirement plan providers—now applies to health care providers as well. And plan sponsor fiduciaries are on the hook to ensure that those fees/services rendered are reasonable, as they have been required to do for retirement plans.
Failing to comply with the requirements of the CAA leaves employers at risk of fines and class-action lawsuits. But most employers are still in the dark, believing their broker or TPA will handle compliance on their behalf or that it’s simply “no big deal.”
“The fiduciary duty for a healthcare plan sponsor is essentially the same duty as a retirement plan sponsor of a 401(k) or 403(b),” Jerry Schlichter told NAPA Net earlier this summer. “That duty is to work for the sole benefit of the employees and to make sure fees are reasonable. And that applies to healthcare as well.”
Schlichter Bogard is now running ads on Linked In targeting an expanding number of firms with a simple message: “Are you a current ______ employee who has participated in the company’s healthcare plan? You may have a legal claim—and we’d like to speak with you.”
As of now, the employers targeted via Linked In are:
- Dollar Tree
- State Farm
You can find out more about the CAA and its implications in the current issue of NAPA Net the Magazine at: https://issuu.com/usaretirement/docs/_nntm_sum23_complete_issuu/40