The Consolidated Appropriations Act (CAA) legislation clearly identifies your clients as fiduciaries. However, most employers/plan sponsors aren't aware that the law was passed and don't always understand what the implications are to them and their plans. By evolving your practices to incorporate CAA, you will provide significant value to your clients while driving additional growth for your business.
How do we know this? Because we saw this scenario play out in the retirement industry with the Pension Protection Act. As with CAA, the Pension Protection Act identified the employer as the plan fiduciary. Advisors who leaned into the opportunity solidified their relationships with their clients and, as a result, significantly increased their market share. The new regulations and reporting obligations within the CAA legislation provide an identical opportunity for benefits advisors who are ready and willing to take the lead.
Right now, you must help your clients and prospects navigate this unfamiliar territory. There are several actions that you can take to help your clients understand their fiduciary responsibilities:
1. Ensure your clients understand they must acknowledge that they are the named fiduciary for their health care program
2. Help your clients establish a compliant fiduciary procurement process and educate them on their roles and responsibilities as a fiduciary.
3. Confirm that your clients are prepared to identify and eliminate gag orders in their TPA/insurance agreements by the end of the year.
4. Identify the various regulatory reporting, specifically Rx and direct and indirect compensation, that are required by CAA.
5. Explain to clients that they need to own their health care and Rx data in order to fully comply with the CAA regulations. Help clients access and store all of their data.
With many of the regulations in effect for the 2021 plan year, there is no time to waste and those advisors who aren't at the forefront, helping clients through their fiduciary obligations, will find themselves behind.
Hugh O'Toole is the CEO of Innovu.
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