ERISA Compliance: Monitoring Service Providers
ERISA Compliance: Fiduciary Responsibilities
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, employers should:
• Review the service providers’ performance
• Read any reports they provide
• Check actual fees charged
• Ask about policies and practices (such as a TPA’s claims processing systems)
• Ensure that plan records are properly maintained
• Follow up on participant complaints
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers. ERISA includes requirements for both retirement plans (for example, 401(k) plans) and welfare benefit plans (for example, group health plans). ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries.
ERISA includes standards of conduct for those who manage an employee benefit plan and its assets, who are called “fiduciaries.” This Legislative Brief includes a set of frequently asked questions (FAQs) to help employers understand the basic fiduciary responsibilities applicable to group health plans under ERISA.