In the intricate landscape of health plan management, the complexity of fiduciary responsibility cannot be understated. A common question arises when a third party offers to file a CAA (Consolidated Appropriations Act) attestation on behalf of a health plan: Does this reduce or negate the fiduciary liability of the Plan Sponsor?
The simple answer is a resounding “NO.”
First and foremost, it is crucial to understand that health plan participants are owed a fiduciary responsibility by one entity alone—the Plan Sponsor. This fiduciary duty encompasses various aspects, including the prohibition of gag clauses. Even if a Plan Sponsor chooses to assign certain fiduciary responsibilities to a third party, the ultimate responsibility still lies squarely on the shoulders of the Plan Sponsor. This is a fundamental principle outlined under ERISA (Employee Retirement Income Security Act) which the CAA amended.
Some health Plan Sponsors may opt to engage third parties, such as carriers or TPAs (Third Party Administrators), to file attestations on their behalf. While this is legally allowed, it is imperative for Plan Sponsors to recognize that the act of delegation does not equate to the delegation of fiduciary liability. The Plan Sponsor remains responsible for the accurate and timely filing of the attestation, irrespective of third-party involvement.
Plan sponsors entering into agreements with carriers or TPAs for CAA attestation services should scrutinize the underlying service agreements meticulously. Simply relying on a third party’s assurance is not sufficient. The Plan Sponsor should ensure that the third party is competent and capable of fulfilling its contractual duties.
To safeguard against potential complications and legal disputes, health Plan Sponsors are advised to document every step of the CAA attestation process. Whether a third party is involved or not, meticulous documentation serves as a critical tool in demonstrating compliance and diligence in fiduciary responsibilities and provides an affirmative defense.
It is essential to recognize the clear distinction between delegating tasks related to plan attestation and delegating fiduciary liability. While a Plan Sponsor can delegate the responsibility for plan attestation to a third party, they cannot, under any circumstances, delegate the ultimate liability associated with fiduciary duties.
In navigating the intricacies of health plan management, Plan Sponsors must be vigilant in understanding the implications of third-party involvement in tasks like CAA attestation. As the saying goes, caveat emptor—let the buyer beware—applies aptly in the realm of health plan fiduciary responsibilities.