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DOL Issues Temporary Enforcement Policy and Clarifications regarding Required Group Health Plan Disclosures under the CAA

In a recent Field Assistance Bulletin No. 2021-03 (the “FAB”), the DOL announced its temporary enforcement policy (the “Enforcement Policy”), as well as certain clarifications, regarding the new required group health plan service provider disclosures under Section 408(b)(2)(B) of ERISA (the “Disclosure Requirement”). The Disclosure Requirement, which was implemented by the Consolidated Appropriations Act of 2021 (the “CAA”), requires certain persons or entities that provide brokerage or consulting services to group health plans (each, a “Service Provider”) to disclose specified information to a responsible plan fiduciary about the direct and indirect compensation the Service Provider expects to receive in connection with its services to the plan. Links to our prior blog posts about the Disclosure Requirement are available here and here.  With respect to the Enforcement Policy, the FAB provides that, pending further guidance, the DOL will not treat a Service Provider as having failed to make required disclosures to… Continue Reading

Broker / Consultant Compensation Disclosures

The Consolidated Appropriations Act of 2021 requires brokers and consultants to disclose to group health plans the direct and indirect compensation they expect to receive in connection with the services they provide to the plans. This compensation disclosure must be provided before the service contract is entered into or renewed, and the plan must be informed if the information in the disclosure changes. The broker/consultant must also provide the compensation disclosure to a plan upon request in order to permit the plan to comply with any applicable reporting and disclosure requirements. If the compensation disclosure is not provided, a plan fiduciary is required to request the compensation disclosure from the broker/consultant and, if it is still not provided in response to that request, notify the DOL and potentially terminate the contract. Implementing regulations and/or guidance have not yet been issued. This new requirement is scheduled to go into effect on… Continue Reading

DOL Issues Changes to Final Fee Disclosure Rule

The DOL has published changes to the final 408(b)(2) service provider fee disclosure rule. A plan fiduciary must receive the disclosures required by this regulation in order for the arrangement to qualify for the statutory exemption from prohibited transactions for reasonable contacts for legal, accounting or other services necessary for the establishment or operation of the plan. The final rule?ÇÖs effective date has been extended to July 1, 2012, to allow additional time for compliance. Because the disclosure to participants in participant directed investment individual account plans flows from the fiduciary?ÇÖs receipt of the disclosures from service providers, the effective date of the plan level and investment level disclosures for such plans is now August 30, 2012 and the first quarterly participant statement must reflect the additional disclosures and be furnished no later than November 14, 2012. Fully vested Code Section 403(b) annuity contracts and custodial accounts issued before January… Continue Reading

November 2022
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