Since 2021, the fiduciary responsibilities that employers must meet have increased under the federal Employee Retirement Income Security Act (ERISA) for employers providing health insurance, prescription drug and other health benefits to workers and their family members. Since ERISA was enacted in 1974, employers have had a fiduciary responsibility to manage benefits plans solely in the interest of workers and family members, according to the U.S. Department of Labor.
Those responsibilities increased under the Consolidated Appropriations Act (CAA) of 2021, as the Advisory Board explained in a report to its members, “3 ways the Consolidated Appropriations Act could impact healthcare.” That report said that the CAA expanded the scope of employers’ fiduciary responsibilities under ERISA by requiring employers to show that the health care services they purchase for their workers are cost-effective, high quality, and align with mental health parity and pharmacy benefit requirements. The Advisory Board is a research organization serving employers, health care payers and life science companies.
Also under the CAS, employers must evaluate broker and consultant compensation for what’s called “reasonableness.” To help employers complete these evaluations, the CAA gives employers access to data on the cost of benefits and equips them to perform their role as stewards of those finances more effectively by assessing the value of the health care services they purchase for employees.