Navigating Fiduciary Risks in Healthcare Plans

The Evolution of Retirement Benefits and Employer Responsibilities

In this episode of Commercial Carrier Corner, host Jared Taylor sits down with Jamie Greenleaf, co-founder of Fiduciary In A Box, to discuss the evolution of retirement benefits and the growing fiduciary responsibilities facing employers today.

Jamie, who has spent over 30 years in the retirement industry, shares her unique perspective on how retirement benefits have transformed. She explains that initially, employers offered defined benefit plans that provided a stable income for retirees. However, as life expectancies increased, these plans became unsustainable. This shift led to the rise of defined contribution plans, where employees could set aside a portion of their income for retirement, and employers assumed a fiduciary role, ensuring these funds were managed prudently.

Fiduciary Duties in Healthcare Plans: A New Frontier

The conversation then shifts to the similarities between fiduciary responsibilities in retirement and healthcare plans. Jamie highlights the increased litigation risks employers face due to a lack of transparency in managing healthcare plans. Drawing parallels to the retirement space, she warns that large employers are currently the primary targets of such lawsuits, but smaller employers could soon face similar challenges.

One of the most significant issues discussed is the role of Pharmacy Benefit Managers (PBMs) and the potential for legal action against employers who fail to manage these relationships properly. Jamie emphasizes the importance of understanding these fiduciary duties and the heightened interest from the Department of Labor in scrutinizing healthcare plans.

Proactive Steps for Employers and Brokers

Jamie advises employers to first acknowledge their fiduciary status and take proactive steps, such as forming a fiduciary committee and securing fiduciary liability insurance. For brokers, she suggests a careful examination of their practices to avoid conflicts of interest that could lead to legal trouble.