Who is a fiduciary?

A group health plan must identify at least one fiduciary in the written plan or through a process described by the plan. People or entities exercising discretion in plan administration or control over plan assets are fiduciaries to that extent. A service provider performing only ministerial work may not be a fiduciary, but discretion over eligibility or benefits can change the analysis.

The core duties

• Act solely in the interest of participants and beneficiaries for the exclusive purpose of providing benefits.
• Carry out duties prudently.
• Follow governing plan documents to the extent consistent with ERISA.
• Hold plan assets in trust when applicable.
• Pay only reasonable plan expenses.

Business decisions versus fiduciary implementation

Establishing, amending, or terminating a plan and deciding the benefit package are generally settlor or business decisions. Implementing those decisions—administering eligibility, processing claims, interpreting terms, selecting vendors, or handling plan assets—may involve fiduciary conduct.

Prudence is a process

A prudent process identifies needed expertise, compares service providers on consistent information, evaluates fees and conflicts, documents the decision, and monitors performance after selection. Delegating work does not erase the duty to prudently select and monitor the delegate.