DOL Issues FAB 2021-03 with Guidance on CAA Fee Disclosure Rules for Group Health Plans

Alison Smith Fay



The Consolidated Appropriates Act, 2021 (“CAA”), enacted in December of 2020, amended Section 408(b)(2) of ERISA effective December 27, 2021 to require certain service providers to group health plans to disclose their compensation to a responsible plan fiduciary. On December 30, 2021, the DOL issued guidance on the application of the new rules under ERISA Section 408(b)(2)(B) in the form of Field Assistance Bulletin 2021-03. The new FAB establishes a temporary enforcement policy providing that a person will not be treated as having failed to make the required disclosures as long as the disclosures made are in accordance with a good faith, reasonable interpretation of the rules.

The DOL encourages service providers to look to the DOL’s fee disclosure rules for pension plans as a way to establish that they have acted in accordance with a good faith, reasonable interpretation of the rules. The FAB explains that much of the terminology and many of the requirements imposed by CAA with respect to group health plans are identical to the terminology and requirements for pension plans.


The FAB clarifies that the new law applies to both insured and self-insured and large and small group health plans including grandfathered plans. In addition, it lays out the DOL’s view that plans that provide only “excepted benefits”[1] (for example, limited scope dental and vision plans) are covered plans subject to the new law.


ERISA Section 408(b)(2)(B) describes two categories of “covered service providers” to whom the new disclosure requirements apply – providers of “brokerage services” and providers of “consulting services.” The FAB emphasizes that the definition of “covered service provider” is not limited to service providers who are licensed as, or who market themselves as “brokers” or “consultants.” The FAB states, “The fact that a service provider does not call itself a ‘consultant’ or charge a ‘consulting’ fee is not dispositive, for example, as to whether the provider is ‘consulting’ for purposes of section 408(b)(2)(B).”


Some may have thought that a person who receives a fee in exchange for a referral of business cannot be a covered service provider if that person is not providing services defined as either “brokerage services” or “consulting services.” The DOL, referring to the legislative history, has suggested that “service providers who reasonably expect to receive indirect compensation from third parties in connection with advice, recommendations, or referrals” regarding any of the services described in the statute as “brokerage services” or “consulting services” can be covered service providers who are required to disclose their compensation.


Under the CAA, only contracts or arrangements entered into, extended or renewed on or after December 27, 2021 are subject to the ERISA Section 408(b)(2)(B) disclosure rules. For this purpose, the date on which a contract is entered into is the date the contract is executed. A broker of record agreement is considered entered into on the earlier of the date on which it is submitted

[1] Plans that provide “excepted benefits” are excluded from some of the requirements of Part 7 of ERISA, for example, the portability and nondiscrimination provisions under the Health Insurance Portability and Accountability Act (HIPAA), the mental health parity provisions and the Affordable Care Act market reforms.



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