Employee Benefits Blog

In Field Assistance Bulletin 2021-03 (12/31/21) (FAB), the Department of Labor (DOL) issued guidance and temporary enforcement policy to address the new 408(b)(2) disclosure requirements that apply to certain service providers to group health plans.  The Consolidated Appropriations Act of 2021 amended ERISA Section 408(b)(2) to extend the disclosure requirements that have long applied to retirement plans, to group health plans.  The FAB is not “regulatory guidance” but does offer some presumably non-regulatory guidance and a temporary policy to address issues under the new disclosure rules in the form of questions and answers that address the following issues:

• Until future regulatory guidance is issued, the DOL will not treat a service provider as having failed to make required disclosures as long as the disclosures are made in accordance with a good faith, reasonable interpretation of the new disclosure rules;

• Because the new disclosure rules are “substantially similar” to the existing disclosure rules for retirement plans, the DOL believes that covered service providers to group health plans can reasonably rely on prior DOL guidance developed for service providers of retirement plans;

• The new disclosure rules apply to both fully insured and self-insured group health plans;

• Plans that provides only “excepted benefits” (e.g., dental and vision benefits) are subject to the new disclosure rules even if those plans are excepted from certain parts of ERISA;

• The term “covered service provider” under the new disclosure rules is not limited to service providers who are licensed as, or market themselves as, “brokers” or “consultants”;

• When specific compensation payable to the service provider is not known, the DOL believes it is reasonable to disclose compensation in reasonable ranges or estimates;

• The new disclosure rules apply to any contract executed or renewed on or after 12/27/2021;
  • The date on which a contract or arrangement for services is entered into between an agent or broker and a plan fiduciary will be considered the date the contract or arrangement is “executed”;
  • For example, if a new contract was entered into by a broker and a plan fiduciary on 12/15/21 for the 2022 plan year, that contract is not subject to the new disclosure rules until the contract is renewed or extended; and

• The new disclosure rules applies to both small and large group health plans (i.e., whether or not the plan has more or less than 100 participants).