During the next several weeks, we will publish a series of articles that dive deeply into “health plan hygiene” relating to health and welfare benefit plan fiduciary issues and how employers can protect themselves in this quickly evolving area.

Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (ERISA) requires certain disclosures regarding employee benefit plan fees.  When this so-called fee disclosure rule was put in place for retirement plans, it sparked litigation regarding whether the fees paid by defined contribution retirement plans for recordkeeping, plan administration, and investment management are too high.  These cases have included claims of ERISA fiduciary breaches and prohibited transactions and have plagued the retirement plan industry for the last two decades.

The disclosure rule was expanded by the Consolidated Appropriations Act of 2021 to apply to welfare plans, and several notable cases have already been filed against welfare benefit plan sponsors. These recent cases have included claims that the benefits committees have been imprudent in their plan design, have overpaid for benefits, have set their premiums too high because of commissions being paid to brokers, have improperly retained rebates, and have had a conflict of interest when selecting plan partners.

Note that while there is no law requiring employers to sponsor a retirement plan for their employees, the same is not necessarily true for welfare benefits. Under the Affordable Care Act, certain large employers are required to offer medical insurance to full-time employees or risk a penalty from the Internal Revenue Service.  As a result, employers who offer group health insurance will be at risk for claims regarding these benefits and services and cannot protect themselves by simply not offering the benefit.

Now is the time for plan fiduciaries to protect themselves from potential claims by revisiting their fiduciary practices as they apply to health and welfare plan administration.  

Check our blog regularly for more information on this topic.  In the meantime, please contact a Jackson Lewis employee benefits team member or the Jackson Lewis attorney with whom you regularly work if you have questions or need assistance.

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Photo of Natalie M. Nathanson Natalie M. Nathanson

Natalie M. Nathanson is a principal in the Miami, Florida, office of Jackson Lewis P.C. She focuses her practice on employee benefits, ERISA plans, and executive compensation matters.

In her legal practice, Natalie offers a depth of experience gained from serving as both…

Natalie M. Nathanson is a principal in the Miami, Florida, office of Jackson Lewis P.C. She focuses her practice on employee benefits, ERISA plans, and executive compensation matters.

In her legal practice, Natalie offers a depth of experience gained from serving as both in-house counsel and a law firm partner. Natalie understands that clients want easy-to-understand, helpful, real-world advice and counsel. She appreciates that while the issues underlying benefits questions can be complex, employers need responsive service, straightforward advice, and concise risk assessments so they can make time-sensitive business decisions while ensuring they remain in compliance with applicable laws and regulations.

Natalie counsels clients on compliance and administration of qualified retirement plans under ERISA and the Internal Revenue Code and assists with welfare plan issues involving cafeteria plans, health plans, flexible spending accounts, the Affordable Care Act (ACA) and COBRA. She provides training and guidance to Employee Benefits Administrative and Trust Investment Committees regarding their fiduciary duties under ERISA. Natalie also advises on non-qualified deferred compensation arrangements and compliance with Section 409A of the Internal Revenue Code.

Natalie has successfully negotiated with the Internal Revenue Service, including in Employee Plans Compliance Resolution System (EPCRS) filings, Employer Shared Responsibility Penalties under the ACA, and applications for tax-qualification determination letters. She has also represented clients in negotiations with the Department of Labor regarding Voluntary Fiduciary Correction Program filings and incomplete Form 5500 submissions.

In Natalie’s day-to-day practice she combines her wide range of experience with ongoing study of the evolving legal landscape to offer clients plain-English advice on a variety of employee benefits issues.