Anyone who exercises authority or control over a group health and welfare benefit plan can incur personal liability.
Rizor & Nolan Advisors created this informative email series to give you advice on how to manage your health and welfare benefit plans, and to tell you about the advantages of working with our expert team.
What Most Employers Don’t Know About Personal Liability
One thing that most employers or plan administrators fail to understand is the extent of their own personal liability for any issues related to their health and welfare benefit plans.
In fact, anyone who exercises any authority or control over a group health and welfare benefit plan is considered a plan fiduciary whether or not they are the named a fiduciary in the plan document or not.
In other words, it’s the function or role a person at your business plays in the administration of such a plan that determines their personal liability and not their title or whether they are named as the fiduciary in the plan documents.
How Is Personal Liability Determined?
Under ERISA, which is one of the laws governing health and welfare benefit plans, the liability is assessed against the plan fiduciaries and not necessarily the plan sponsor.
Therefore the owner of the business or the CEO or president of the business may have no liability, while those who are actually making the decisions about the plan carry all of the personal liability.
Personal liability might fall on:
• the VP or Director of HR,
• the Controller,
• the CFO, or
• any other person who makes plan decisions regardless of their title.
Based on our years of expertise, in the case of a problem, ERISA looks to the individuals who have plan authority and NOT to the employer, the plan sponsor, or to the plan itself when it assesses financial liability.
We specialize in giving small to mid-market employers a level of quality and expertise – with administration and protections usually only available to Fortune 500 companies.
Rizor & Nolan Advisors is the only firm that establishes, implements and administers a comprehensive benefit plan process designed to:
- improve plan quality,
- lower plan costs,
- protect you from governmental investigations and audits,
- protect you from penalties and fines, and
- protect you from civil actions.
Rizor & Nolan Advisors becomes a contractual operational fiduciary to your plan and is subject to the same liability as internal plan fiduciaries.