Under the Consolidated Appropriations Act of 2021, employers, labor unions and other plan sponsors face significant new requirements related to their role as fiduciaries for healthcare benefit programs. Individuals who oversee and manage health plans, including Board members, senior management, Human Resources and Finance leaders can be held personally liable if organizations fail to meet these obligations. Legal experts anticipate a wave of new class action suits and related litigation from health plan participants seeking damages from plan sponsors who fail to comply with specific fiduciary requirements.
As plan sponsors seek to mitigate these fiduciary risks, they are increasingly demanding better data from insurance companies, third party administrators, pharmacy benefit managers and other healthcare vendors. In many instances, vendors have stymied these efforts, pointing to limitations in data systems and contractual entanglements which they say forbid the sharing of additional health data with plan sponsors. From a legal standpoint, the inability to obtain necessary data from vendors will most likely fail to shield plan sponsors from lawsuits and the risk of significant financial penalties.
Fortunately, the federal government has enacted new provisions – including the No Surprises Act and the Transparency in Coverage Rule – which strengthen plan sponsors’ ability to gain unfettered access to the data they need to fulfill their role as fiduciaries. Moreover, on February 13, 2024, over 75 employers, unions and alliances banned together in sending in support of the bipartisan Senate Bill 3548, The Health Care PRICE Transparency Act 2.0. In a letter to the Senate Majority and Minority Leaders, the group of alliances, unions, and employers wrote, “The situation is so dire that many have had to sue their insurers and TPAs to gain access to their data and fulfill their fiduciary duty. The transparency provisions in this bill will empower employers and unions, which provide coverage to nearly 160 million Americans, to greatly reduce health plan costs, improve business competitiveness, and share savings with members through higher wages and lower premiums.”
With growing bipartisan support for healthcare transparency and new legal exposure, it is now imperative for plan sponsors to gain full access to their data and implement fiduciary best practices. To map out the next steps, and mitigate your risks as a fiduciary, contact your Bolton representative directly or email us at solutions@boltonusa.com to learn more.
