Thus, fiduciary status is based on the functions performed for the plan, not just a person’s title.
Group health plans can be structured in a variety of ways. The structure of the plan will affect who has fiduciary responsibilities. Most employers sponsoring self-funded group health plans exercise some discretionary authority and therefore are fiduciaries. If the employer sponsors a fully-insured plan, fiduciary status depends on whether the employer exercises discretion over the plan.
A plan must have at least one fiduciary (a person or entity) named in the written plan, or through a process described in the plan, as having control over the plan’s operation. The named fiduciary can be identified by office or by name. For some plans, it may be an administrative committee or a company’s board of directors.
A plan’s fiduciaries will ordinarily include:
• Plan administrators, trustees and investment managers.
• Individuals exercising discretion in the administration of the plan.
• Members of a plan’s administrative committee (if applicable) and those who select committee officials.
Also, a number of decisions are not fiduciary actions, but, rather, are business decisions made by the employer. For example, the decisions to establish a plan, determine the benefit package, include certain features in a plan, amend a plan and terminate a plan are employer business decisions not governed by ERISA. When making these decisions, an employer is acting on behalf of its business, not the plan, and, therefore, is not a fiduciary. However, when an employer (or someone hired by the employer) takes steps to implement these decisions, that entity is acting on behalf of the plan and, in carrying out these actions, may be a fiduciary.
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.