2022 has proven to be a pivotal year for group health plans, as many new rules and compliance requirements take effect. Of note, the Consolidated Appropriations Act (“CAA”), signed into law on December 27, 2020, introduced a new requirement that, starting December 27, 2021, brokers and consultants providing services to Employee Retirement Income Security Act (“ERISA”) group health plans must disclose to plan fiduciaries, in writing, certain direct and indirect compensation they receive for providing such services. The new requirement applies to those service providers anticipated to earn $1,000 or more, with disclosure required reasonably in advance of executing the applicable agreement or arrangement (effective for contracts or arrangements entered into, extended, or renewed on or after December 27, 2021).
In tandem with this mandate, plan sponsors now also have a fiduciary responsibility to report to the Department of Labor (“DOL”) any such service providers who fail to disclose their compensation appropriately. Accordingly, plan sponsors and administrators, as well as health plan brokers and consultants, should familiarize themselves with these new disclosure requirements as soon as possible to ensure timely compliance.