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Fiduciary Responsibility

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What is an ERISA Fiduciary?

Under the Employee Retirement Income Security Act (ERISA), health plan fiduciaries play a critical role in administering and managing group health plans. These individuals hold discretionary authority over plan assets and are responsible for ensuring the best interests of plan participants and beneficiaries. 

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The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

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ERISA requires plans to provide participants with plan information including important information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; gives participants the right to sue for benefits and breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).

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In general, ERISA does not cover plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.

Identify

Clearly identify the fiduciary or fiduciaries for the Plan and have it in writing.

Train

Set training to outline the duties and responsibilities, especially if there is a change in personnel.

Paperwork

Make sure all documents are updated to reflect who is the fiduciary or fiduciaries.

Document

Documenting processes is vital to validate proven steps were taken by of the fiduciary.

Responsibilities

Outline duties, vendor selection  process, and continual monitoring expectations.

Protection

Fiduciaries can be found personally liable for not executing the duties of the fiduciary.

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