ERISA Fiduciary Governance (Part 2 of 4)

[0:00] Amber (Host):

Welcome everyone to ERISA Fiduciary Governance Part Two: Let's Talk Transparency Obligations. Thank you for joining us.

The Benefits Compliance team will be answering your questions via the Q&A. If we don't get to your question, please follow up with your advisor.

This session is being recorded. The full recording and PowerPoint slides will be shared in a follow-up email and on the NFP website by Monday.

Speaker Introductions

[0:44] Amber:

I'm handing it over to our presenters:

• Chase Cannon, Senior VP and Deputy Chief Compliance Officer, NFP
• Carol Wood, VP and Counsel, Benefits Compliance, NFP
• Heidi Codle, Senior VP, Cost Containment Strategies, NFP

[0:57] Chase Cannon:

Thanks, Amber. This is Part 2 of a four-part series on ERISA Fiduciary Governance. Today, we’re focused on transparency obligations and how they relate to fiduciary governance.

Disclaimer: This presentation is for general guidance only and does not constitute legal or tax advice. Information is current as of May 21, 2025.

Section 1: Governance Overview

[1:53] Chase Cannon:

A quick overview of fiduciary governance principles:

• Fiduciary = heightened responsibility
• Make prudent, informed decisions in the best interest of plan participants
• Governance varies by size, structure, and whether you're fully or self-insured

Key Steps to Establishing a Governance Program

1. Identify plan fiduciaries
2. Understand ERISA fiduciary standards (prudence, loyalty)
3. Review governance structure
4. Document decision-making processes
5. Monitor service providers
6. Consider fiduciary liability insurance

Section 2: Fully vs. Self-Insured Plans

[10:07] Chase Cannon:

• Fully Insured: Duties are shared with carriers
• Self-Insured: Employers bear more fiduciary responsibility
  • Must lead compliance, especially with transparency obligations

Section 3: Transparency Laws

[12:04] Chase Cannon:

Purpose: Lower healthcare costs and increase information availability for better decisions.

Focus on:

• Transparency in Coverage Rule (TiC) – November 2020
• Consolidated Appropriations Act (CAA) – 2021
  • (Includes gag clause prohibitions, MHPAEA comparative analysis, etc.)

Section 4: Deep Dive – Transparency Rules

[15:04] Carol Wood:

• Gag Clause Prohibition
  • Must ensure contracts don’t restrict access to pricing or claims data
  • New FAQs require sponsors to confirm no downstream gag clauses exist
  • Must attest annually by Dec 31
• Mental Health Parity Comparative Analysis (MHPAEA)
  • Must document and compare NQTLs (e.g. pre-authorization, exclusions)
  • 2024 rules paused pending legal review (ERIC lawsuit)
  • Certification requirement not enforced during interim
• C. RxDC Reporting
  • Due June 1
  • Submit healthcare and drug spending data to CMS•    First reports were aggregated and lacked plan-level insights
  • Expect regulatory improvements
• D. Service Provider Compensation Disclosures
  • Required for brokers and consultants receiving $1,000+
  • Must specify all compensation types
  • No formal regulations yet, but informal guidance exists
  • PBM compensation under focus by current administration
  • Lawsuits increasing → formalize review processes

Section 5: Litigation Update

[33:03] Chase Cannon:

• No participant lawsuits have yet demonstrated actual injury
• Key Cases: Johnson & Johnson, Wells Fargo, JPMorgan
• Cunningham v. Cornell (retirement) → Looser standards for standing
• Takeaway: Document fiduciary processes to reduce litigation risk

Section 6: Transparency Tools and Executive Order

[36:39] Carol & Heidi Codle:

• TiC & hospital transparency rules provide valuable pricing data
• New executive order (Feb 2025) mandates enforcement & standardization
• Guidance expected soon (May 2025) – may include Rx pricing

Section 7: Fiduciary Tools and Solutions

[42:08] Heidi Codle:

• Data Analytics
  • "Data is your first line of defense"
  • Fully insured: Request data even if access is limited
  • Self-funded: Leverage vendor tools to analyze gaps in care
• Vendor Financial Stability
  • Use NAIC ratings for carriers
  • Use S&P, Fitch for stop-loss/reinsurers
• Next-Gen Tools: Network Performance Reports
  • NFP tool compares claims vs. top 700 CPT codes
  • Generates 14-page reports comparing network performance (cost + quality)
  • Available to NFP clients at no additional cost

Key Takeaways

[56:04] Chase Cannon:

1. Understand fiduciary duties under ERISA
2. Know your obligations under CAA and TiC rules
3. Use cost-containment and transparency tools
4. Monitor and document service provider compensation
5. Expect increased enforcement – especially under new executive orders

Resources

• ERISA Fiduciary Governance: A Guide for Employers
  • Includes:
  • Governance overview and checklist
  • Sample documents (charters, minutes, appointment letters)

Ask your NFP representative for a copy.

Upcoming Webinars

• Part 3: July 16, 2025
• Part 4: September 17, 2025
• (All sessions at 3 PM ET)

Closing

[1:00:47] Amber (Host):

Thank you to Chase, Carol, and Heidi for your insights. Reminder: the recording and slides will be sent via email by Monday. Please complete the survey at the end of this session to help us improve.