401(k) Specialist Issue 2 - 2021 - 34

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The Consolidated Appropriations Act of 2021,
signed into law at the end of December, brought
significant changes for health insurance brokers.
Yet, there's substantial opportunity for retirement
plan advisors as well-especially those with a firm
grasp of fiduciary roles and responsibilities.
Simply put, transparency is coming to healthcare
much as it did in the retirement industry. The
CAA clearly states the plan sponsor is a fiduciary,
removes gag clauses in carrier contracts pertaining
to price and quality information and requires
408(b)(2)-style broker compensation disclosure.
" It's the evolution of fiduciary duty, " said
Jamie Greenleaf, Managing Director and
Founder of TILT, a health benefits advisory
firm that seeks to increase transparency,
decrease costs and help advisors bring a
consistent process to how participants select
their healthcare plans. " It's taking the same
path that the retirement industry did 20plus
years ago. "
Her dual role as TILT founder and lead
advisor and principal of Cafaro Greenleaf,
a top retirement and benefits advisory firm,
gives her a unique view of the recent legislation's
impact and the incredible opportunity
for retirement plan advisors.
" This is what we saw the retirement
space go through, where retirement plan
advisors traditionally didn't take a fiduciary
eye to the benefits spend in determining if
it was in the best interest of the participant, "
she explained. " But now they must, and
that's what's happening in healthcare. "
While health insurance brokers haven't had
a formal fiduciary duty, plan sponsors have, she
noted. Yet, it was one they failed to address because
they didn't see the liability in the same
way as their retirement plan benefits.
" The broker will now have to disclose
their compensation, " she said. " Anything
that's paid over and above $1,000 is going
to have to be disclosed on the Form 5500.
ISSUE 2 2021 | 401kSpecialist.com
" There is a
fiduciary duty to
disclose material
information to
participants in
group health
plans. "
- Marcia Wagner
Wow, that sounds like what happened in the
retirement space. "
She saw it as a new business line, to a
certain degree, and retirement plan advisors
can take their knowledge of ERISA and
establish processes and the same kind of
framework around the healthcare space.
" Retirement consultants know more than
they think, " she claimed. " They believe that
because it's healthcare, they won't understand
it, but they do. We do this every day.
We look at plan design, and we determine
if the company is spending its dollars in the
most advantageous way for the employees.
We look at transparency and how to teach
employees to become better prepared for
retirement. The fiduciary processes that
we have in place can transfer right into
healthcare. "
Hugh O'Toole, CEO of Pittsburgh-based
data analytics firm Innovu, was even more
optimistic. He claimed the passage of the
CAA and its healthcare-related provisions-
as well as the consolidation of retirement
advisors with health insurance and property/casualty
advisors-is too big of a coincidence
to ignore.
" Top tier retirement advisors have
perfected running a fiduciary procurement
play, " O'Toole noted. " This is exactly
what the future of healthcare consulting
will require. The aggregators with proper
execution have a huge opportunity to
gain market share if they use the fiduciary
strengths of the retirement consultant with
the knowledge of the healthcare advisor. "
Defined Contribution Déjà Vu
The issue of transparency and fiduciary
duty within the group health plan space is
something high-profile attorney and ERISA
expert Marcia Wagner hit upon early. The
Founder and Managing Partner of The
Wagner Law Group recently released a
white paper titled Disclosure to Welfare Plan
Participants: A Fiduciary Duty, as well as a
webinar dedicated to the topic.
" There is a fiduciary duty to disclose
material information to participants in group
health plans, " Wagner definitively stated to webinar
attendees. " While it's not often referred
to as a fiduciary duty, it is not a new duty, but
rather one with a firm basis in trust law. It has
simply not been articulated as such. "
She said it will be discussed more frequently
and with more importance as courts
are increasingly involved.
" There is going to be, I believe, a veritable
tidal wave when people understand that
the fiduciary responsibilities, liabilities and
obligations are equally applicable in the wild
west of welfare benefit plans, as they are in,
for example, 401(k) plans, " Wagner argued.
To back her assertion, she referenced
Section 404 of Title 1 of ERISA, which
set forth four basic principles of trust law:
duties of prudence, loyalty, diversification
of plan assets, and the administration of the
trust in accordance with its terms.
" The is no question that these four
principles are equally applicable to employ
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401(k) Specialist Issue 2 - 2021

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