The Consolidated Appropriations Act (CAA) was passed in 2021 and amends ERISA (Employee Retirement Income Security Act). It contains 90 pages of new rules, law, and legislation that affect employers who offer a health plan to their employees. Employers who offer a health plan are mandated to perform specific administrative, data analytics, and benchmarking processes on their health plan. The goal of this benchmarking is to determine which costs are appropriate and reasonable, and which can be reduced. The law has been in place for almost three years and penalties begin at $100 per day, per employee for every day you are out of compliance. HPfid provides everything employers need to activate and document a compliant fiduciary process.
Four things every employer needs to know about the Consolidated Appropriations Act
Employers need to activate a compliant fiduciary process ASAP, and they don’t know how.
A new law was passed in 2021 called the Consolidated Appropriations Act or CAA that amends ERISA (the Employee Retirement Income Security Act). The CAA was a financial relief package for our country following the pandemic. Layered within the CAA were 90 pages of new rules, law and legislation that affect employers who offer a health plan to their employees. Every employer who offers a health plan to their employees needs to understand this new law both for the actions they must take, and the penalties if they fail to do so.
With new ERISA laws, fiduciaries need to perform specific, documented duties, or face stiff penalties and legal exposure for non-compliance.
With the new CAA law, employers who offer a health plan are mandated to perform specific administrative, data analytics, and benchmarking processes on their health plan. Digging into cost layers. Few understand exist. Good. The goal of this benchmarking is to determine which costs are appropriate and reasonable, and which can be reduced. The good news is also the bad news. There are a lot of costs that do not belong, but once you identify it. You get to reduce the costs to your business and your employees.
One of the most important things to take away from this are the penalties, financial exposure, and business risk that you as an employer, and you personally as a fiduciary, face if you choose not to comply with the new fiduciary mandate. Penalties from the government begin at $100 per day, per employee for every day you are out of compliance. That is $18.25M for one year of non-compliance for a 500-employee company! The law has been in place for almost three years now. It is imperative as a health plan sponsor, AKA employer offering a health plan, to immediately take action to understand the CAA, your fiduciary duties and mandate, and begin a fiduciary process. A legal attestation at the end of this year is required on a Department of Labor website for plan years 2020, 2021, and 2022. Failure to do so exposes the firm to these harsh penalties.
HPfid provides everything you need to activate and document a compliant fiduciary process.
There is good news in this story to be excited about. The good news is once you activate your fiduciary team and process, and learn where to look for unnecessary cost, you will find savings. Here at HPfid, we are helping Employers quickly find sizable savings for their firm and for their employees. You will remove significant costs from your health plan almost immediately. This translates into lower costs for your business and lower costs of care for medicine and healthcare for your employees and their families.
While this law is still new, there are a handful of firms that have emerged in the industry to coach and guide the plan sponsors to create these fiduciary processes. They know how to examine health plan components to remove these excessive costs. Healthcare was intentionally designed with opacity and complexity by the big businesses that control healthcare today. You will not know where to look, nor how to find the cost savings on your own. The Healthcare industry has been designed to maximize and grow revenues year over year for their shareholders, not to reduce costs for the insured.
You need a guide. Find a good guide and you will find significant savings.
Activated fiduciaries pay less for healthcare. They enjoy lower rates and have happier, healthier people.
Once you understand and educate yourself on the CAA law, and the mandates within it, you will become an educated fiduciary. As you advance on your journey, you will become an activated fiduciary. One that is actively examining and benchmarking the elements of your health plan at a level you did not previously know was possible.
The good news is activated fiduciaries pay less for healthcare. Their employees enjoy lower costs for care and live healthier lives and are more productive for their employers. You as a business will win and your employees will win when you become an activated fiduciary. The fact that you have read this document and are starting your education, you now have a duty to advance. It is your move. And the news ahead is good. There is blue sky and an opportunity to save. Find a fiduciary guide. And take advantage of what was created for you within the CAA.
